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With the rising cost of education, securing a child's academic future has never been more crucial for parents and
grandparents. One of the most powerful tools at their disposal is the 529 Plan—a tax-advantaged savings vehicle
tailored for educational purposes. With the modi cations to the Free Application for Federal Student Aid (FAFSA) and
the new provision allowing unused 529 Plan savings to be transferred to a Roth IRA, the 529 Plans are becoming an
even more attractive option for long-term planning.

Rollover to Roth IRA: A New Advantage

A signi cant update in the 529 Plan landscape is the ability to roll
over funds to a Roth IRA. Traditionally, the 529 Plan was a
commitment to educational savings since distributions could only
be used for educational purposes. The SECURE 2.0 legislation,
however, is a game-changer. From the 2024, surplus funds in 529
FAFSA's New Take on Grandparent-529 Plans Plans can be transferred to Roth IRAs, giving greater exibility to
families and eliminating concerns of over-contributing. It's
Historically, there was concern that contributions from grandparents important to note that rollovers are subject to Roth IRA annual
through 529 Plans could reduce a student's eligibility for nancial aid. contribution limits. With a lifetime cap of $35,000 on transfers
The updated FAFSA, implemented this school year, addresses this to a Roth IRA, strategic contributions to the 529 Plan can
issue by no longer including questions about nancial contributions optimize this bene t. Additionally, the 529 account must be
from grandparents. Consequently, grandparents can fund their more than 15 years old. This is to ensure that these Plans,
grandchild's 529 Plan without risking their aid eligibility. These primarily created for educational purposes, are indeed used for
changes not only make it more appealing for grandparents to start a such before considering them for retirement savings.
529 Plan but also offer assurance that accumulated savings will not
jeopardize the student's future nancial aid opportunities. Conclusion
The world of 529 Plans is evolving, offering more exibility and
Before these changes, distributions from grandparent-owned 529
Plans were treated as untaxed student income on the FAFSA, thereby options for a family to secure their child's future. At Moran
reducing aid eligibility. With the new FAFSA rules, students' income Wealth Management®, we're here to guide you through these
and tax details will be directly sourced from federal tax returns, changes and ensure your nancial strategies are optimized for
eliminating manual reporting of cash support from grandparents. This your family's unique needs. Considering a 529 Plan or looking to
change ensures more accurate reporting and better nancial aid maximize your Roth IRA rollover opportunities? Act now! Call us
prospects. today at (239) 920-4440 to schedule your consultation.

That said, grandparents must remain cognizant of the CSS Pro le—an
alternate nancial aid form employed by around 200 private colleges.
It's yet to be seen if the FAFSA updates will in uence the CSS Pro le
and associated aid at different institutions. Staying informed is
paramount.
Tom Moran, AIF®
Chairman, CEO and CIO
Moran Wealth Management®
P: (239) 920-4440 | Thomas.Moran@MoranWM.com | www.MoranWM.com | 5801 Pelican Bay Boulevard, Suite 110, Naples, FL 34108
Moran Wealth Management, LLC is a registered investment adviser. Registration does not imply
a certain level of skill or training. For additional information about Moran Wealth Management,
LLC, including its services and fees, request the rm’s disclosure brochure using the contact
information above or visit adviserinfo.sec.gov. Moran Wealth Management, LLC is a separate entity and not
af liated with any other entity or practice that uses the same name. 23