My nephew is enrolled in helicopter flight training. Not through a university (e.g. Embry Riddle) but rather through a local airport with a flight school. As I understand the lingo, this would be Part 61 in the eyes of the FAA. He is currently working part-time to help fund this, and is slowly progressing as he makes the money to pay for training.
There is a well-funded 529 set up for him by his grandparents, with him as the beneficiary. As he is not enrolled in an accredited educational institution, he cannot tap into these funds without penalty.
My question then, is this. Under new law (SECURE 2.0) this long-existing 529 can be rolled over into a Roth IRA for him. A maximum of $7,000 per year, with a lifetime maximum of $35,000. These rolled over dollars ... are they treated the same as regular Roth IRA contributions, meaning (as contributions) could they be immediately withdrawn without penalties? I'm curious if this could be a viable path to use 529 contributions for flight training. It seems like there's likely something here that is "too good to be true" but am trying to be a helpful uncle and do the research. Thanks!
There is a well-funded 529 set up for him by his grandparents, with him as the beneficiary. As he is not enrolled in an accredited educational institution, he cannot tap into these funds without penalty.
My question then, is this. Under new law (SECURE 2.0) this long-existing 529 can be rolled over into a Roth IRA for him. A maximum of $7,000 per year, with a lifetime maximum of $35,000. These rolled over dollars ... are they treated the same as regular Roth IRA contributions, meaning (as contributions) could they be immediately withdrawn without penalties? I'm curious if this could be a viable path to use 529 contributions for flight training. It seems like there's likely something here that is "too good to be true" but am trying to be a helpful uncle and do the research. Thanks!
Statistics: Posted by dabretty — Sun Jan 26, 2025 5:22 pm — Replies 4 — Views 195