529 plan rollover to Roth IRA -- anyone done this yet?

Has anyone actually done the 529-to-Roth IRA rollover that the SECURE Act 2.0 made possible? I've been reading about it and it seems like a great option for overfunded 529 plans but the rules are kind of confusing.

Our situation: we have a 529 for our daughter with about $42,000 in it. She's 14 and we're pretty sure she'll go to a state school where costs will be maybe $25-30k total (we're in-state). So we'll probably have $12-17k left over.

From what I understand, starting 2024 you can roll over unused 529 funds to a Roth IRA for the beneficiary, subject to:
- The 529 must have been open for 15+ years
- Annual limit is the Roth IRA contribution limit ($7,000 for 2026)
- Lifetime max is $35,000
- Contributions made in the last 5 years can't be rolled over

So in theory we could roll over $7k/year for 5 years into our daughter's Roth IRA once she starts earning income. That would be an incredible head start for her retirement savings.

Anyone gone through the actual process? Is it as straightforward as it sounds or are there gotchas?

Haven't done it yet but I've researched it extensively because I'm in a similar situation.

Your understanding of the rules is correct. The main gotcha that people miss: the annual rollover counts against the beneficiary's Roth IRA contribution limit for that year. So if your daughter contributes $3,000 to her own Roth IRA, you can only roll over $4,000 from the 529 that year (not the full $7,000).

Also important: the beneficiary needs to have earned income at least equal to the rollover amount. If your daughter makes $5,000 from a summer job, you can only roll over $5,000 max that year.

The 15-year rule is the one that trips most people up. The clock starts from when the 529 was OPENED, not when contributions were made. So check your opening date. If you opened it when she was born (age 0), she'll be 15 when the 15-year clock completes. Timing works out perfectly.

I think this is genuinely one of the best provisions in SECURE Act 2.0. A $35,000 Roth IRA at age 18-22 could grow to $500k+ by age 65 assuming 7% real returns. Massive head start.

I actually ran the numbers on this. Assuming:
- $35,000 rolled into Roth IRA at age 20 ($7k/year for 5 years)
- 7% real return (after inflation)
- No additional contributions ever

Age 30: $68,850
Age 40: $135,400
Age 50: $266,350
Age 60: $523,900
Age 65: $734,750

That's $735k in today's dollars from $35k invested in your early 20s. All tax free because it's in a Roth.

If she continues contributing $7k/year on her own from age 25-65 on top of the initial rollover, the total grows to well over $2M in today's dollars.

The SECURE 2.0 provision is ridiculously powerful for families who can afford to overfund 529s. Basically a backdoor way to give your kids a massive Roth head start.