Secure Act 529 to Roth IRA (# of accounts per child strategy)

[Mgmny]

Hello!

I wisely (or so i thought!) only created one 529 account for my 3 children (4, 2, and almost 1 and maybe 1 more someday), so that when it came time for us to use the funds, i could "evenly" distribute the money between the kids, so that each child got roughly the same dollars as all the others through 529 rollover/beneficiary changes. In other words, if i had 1 account with 300k in it, i could give each kid $100k easily instead of ended up with 3 accounts with 80, 120, and 100 (so 1 kid ends up with 40k more than another, causing "unfairness" issues).

However, now i see that the Secure Act will allow Roth IRA rollovers if the account has been open for 15 years. Do i need to rethink my 1 account strategy and start contributing to 3 accounts or is it good enough to simply just open 2 more accounts with a minimum deposit and shuffle the money around in 14-18 years when it's time for post high school education expenses?

I know some people think my 1 account strategy is dumb, but until the Secure act came along with this rIRA conversion, i didn't see any upside to creating 3 accounts.

Any help or thoughts here are appreciated!

[economista]

I think the decision to have 1 account vs 3 also depends on the perks of your given state. In CO there is a matching grant program that will match $1000 per year in each account, so it makes sense for me to have one account per child so each account gets the match, instead of just one account with a plan to split. We end up with 2x as much matching grant money each year!

[Mgmny]

I think the decision to have 1 account vs 3 also depends on the perks of your given state. In CO there is a matching grant program that will match $1000 per year in each account, so it makes sense for me to have one account per child so each account gets the match, instead of just one account with a plan to split. We end up with 2x as much matching grant money each year!

Oh wow! That is nice!! In MN it's just based on total contributions up to some number that is much lower than i am contributing. I don't think the number of accounts or children matter.

[Mgmny]

I think the decision to have 1 account vs 3 also depends on the perks of your given state. In CO there is a matching grant program that will match $1000 per year in each account, so it makes sense for me to have one account per child so each account gets the match, instead of just one account with a plan to split. We end up with 2x as much matching grant money each year!

Also, woah, sorry for the double post, but if parents in CO take advantage of this, plus the Roth IRA rollover, colorado could effectively be funding literally any child's entire retirement fund (if they retire at ~65) with matching contributions to a 529 account in something like the first 10 years of a child's life! That's incredible.

[economista]

Yes, it is really great! I'm glad that I got their accounts set up and then applied for the matching grant when I did. Last year I didn't know about the matching grant, but this time around I did and I got the application in on the last day!