How to Make a Fidelity 529 to Vanguard Roth IRA Rollover

Ever since the SECURE 2.0 Act was signed into law in December 2022, I have been keeping an eye on the provision allowing a tax-free rollover of unused 529 plan funds into a Roth IRA for the 529 plan beneficiary. We're done paying for the education of our children at this point, but ended up over-saving because of their decision to attend public universities that offered generous merit-based scholarships.

Ben Henry-Moreland of Kitces.com has a nice overview of the 529-to-Roth provision here, with these highlights:

• The 529 plan must have been maintained for a period of at least 15 years before the date of the rollover
• The amount of each rollover cannot exceed the aggregate amount of contributions (and earnings attributable thereto) made earlier than the 5-year period before the date of the rollover
• The amount of each rollover also cannot exceed the IRA contribution limit for that year, minus any amounts that the taxpayer contributed directly to the IRA that year
• The amount of each rollover cannot exceed the aggregate amount of contributions (and earnings attributable thereto) made earlier than the 5-year period before the date of the rollover
• The maximum amount of funds that a 529 plan beneficiary can roll into a Roth IRA over their lifetime is $35,000
• Unlike making a normal Roth IRA contribution, where the ability to contribute to a Roth phases out for individuals with higher incomes, there are no income-based phaseouts for a 529-to-Roth rollover

We met all of the above criteria and I checked in with my accountant about potential state tax implications, so I was ready to proceed with the rollover of funds from our Fidelity 529 plans to existing Vanguard Roth IRAs for my children.

This process is initiated with the institution where the 529 plan is held, so I scrolled down to the "To transfer from a Fidelity-managed 529 to an external Roth IRA" section on Fidelity's Making 529 withdrawals and contributions landing page. This states that the procedure to transfer a Fidelity 529 plan to an external Roth IRA is initiated by using this withdrawal form pdf and having a physical check mailed directly to Vanguard.

For the first page of the form, I entered my name, SSN, and phone number for line 1 and the child's name and SSN for line 2. For line 3, I entered the Fidelity 529 plan account number and checked the boxes including "529-to-Roth IRA transfer" and "Leave account open for future possible contributions":

For the second page of the form, I checked the "ONLY the following amount(s) from the following portfolio(s)" box and entered the 529 plan portfolio name and the contribution amount ($7,000 max for 2024) for line 4:

For the third page of the form, I checked the "Current Year Contribution" and "External Roth IRA" boxes. I had already contacted Vanguard support for the proper mailing address to have the check sent to, so I used that address and the Vanguard Roth IRA account number to complete line 5 on this page:

Finally, to complete the form, on the fifth page I entered my name and signed the form for line 6:

At this point it was time for my completed form to be sent to Fidelity. The form gives you a P.O. Box in Cincinnati, OH for mailing via USPS, but instead I uploaded my completed pdf to fidelity.com to the attention of "Account services" via their Secure Message Center (login required) to expedite the process.

Once the Fidelity document upload was complete, it took 9 days for the money to appear in the Vanguard Roth IRAs:

• Day 1: File upload to fidelity.com
• Day 2: Received confirmation message of receipt of documents from Fidelity
• Day 3: Received confirmation message from Fidelity that the check has been printed and will be mailed shortly
• Day 9: Funds appeared in Vanguard Roth IRA