Sens. Cruz, Blunt Rochester Introduce Bipartisan Bill to Give Families Greater Flexibility with 529 Savings

WASHINGTON, D.C. – U.S. Sens. Ted Cruz (R-Texas) and Lisa Blunt Rochester (D-Del.) introduced the 529 Retirement Enhancement Act of 2026 . This bipartisan legislation eliminates the $35,000 lifetime cap on rollovers from 529 education savings accounts to Roth IRAs. Sen. Cruz said, “I have been committed throughout my Senate career to expanding 529 savings accounts to give parents increased flexibility to save and invest in their children’s future. The law currently penalizes families when their children receive a scholarship or choose an alternative to college, leaving education savings unused, which in turn serves as a disincentive to initially use these accounts. The bipartisan 529 Retirement Enhancement Act will give parents greater flexibility to roll over unused education funds into their children’s Roth IRAs, and I’m proud to introduce it.” Sen. Blunt Rochester said, “529 accounts can be incredibly useful in helping families prepare for higher education, but plans can change. A student may receive a scholarship, not use the full balance of their account, or simply choose a different path. Families should be able to preserve financial flexibility regardless of what their child’s education decisions are years down the road. I’m proud to co-lead the bipartisan 529 Retirement Enhancement Act to remove barriers to saving and give families greater peace of mind when investing in their children’s future.” This legislation is supported by the Investment Company Institute. Investment Company Institute Chief of Government Affairs and Public Policy Tom Quaadman said, “ICI applauds Sens. Cruz and Blunt Rochester for their commonsense legislation giving families greater financial flexibility and security. Families with unspent funds in a 529 plan should not be penalized because a student received a scholarship or pursued other options. The Cruz-Rochester bill permits unused education savings to be moved into a Roth IRA allowing young people to get started on their path to a secure financial future.” Read the bill text here . BACKGROUND: The SECURE Act 2.0 allows individuals to roll over funds from a 529 plan into a Roth IRA. Current law subjects these rollovers to a $35,000 lifetime cap, which can leave excess funds in 529 accounts when education savings go unused. This legislation eliminates the lifetime cap while maintaining existing requirements, allowing excess 529 assets to be rolled over into a Roth IRA over time rather than having the assets remain stranded in the 529 account.