529 Plan vs Roth IRA for College 2027

Compare 529 plan vs Roth IRA for college savings 2027 — 529 tax-free for education only, Roth IRA flexible withdrawal of contributions, 529-to-Roth transfers allowed.

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529 Plan Mechanics

Tax-free growth + tax-free withdrawal for qualified education (tuition, room, board, books). Up to $10k/yr K-12. Up to $10k lifetime student loan repayment.

Roth IRA Mechanics

Contribute up to $7k/yr ($8k 50+) post-tax. Tax-free growth + tax-free withdrawal at 59½. Contributions (not gains) can be withdrawn anytime tax/penalty-free.

New 529-to-Roth Rule (2024+)

If 529 account age 15+ years and beneficiary opens own Roth IRA, can roll up to $35k lifetime. Annual cap matches Roth limits. Game-changer for over-funded 529s.

State Tax Deductions

36 states offer state income tax deduction on 529 contributions (limits vary $2-15k). Roth IRA: NO state deduction. State benefit is unique 529 advantage.

Source: irs.gov Publication 970, savingforcollege.com 529 vs Roth analysis. Last updated: May 2026.