It's usually not a good idea to tap your retirement account for college expenses -- but in some cases it makes sense. By Kimberly Lankford, Contributing Editor March 22, 2007 I have a Roth IRA and would like to transfer or convert the account into a 529 college-savings plan. Can this be done?A Roth IRA has two components: what you contributed and what the account has earned. You can't transfer earnings from a Roth IRA to a 529 without owing income taxes plus a 10% penalty, and you probably wouldn't want to. "Most people would want to keep as much as they could in their Roth for retirement savings," says Joe Hurley of Savingforcollege.com However, you can withdraw Roth contributions at any time and for any reason, and a few scenarios might warrant taking some of that money and investing it in a 529 plan. It could be a good strategy if, for example, you need the money for college costs and you can get a state income-tax deduction for your contributions to a 529 plan and benefit from a few years of tax-free growth. Shifting some Roth contributions to a 529 also could improve your financial-aid situation. "If you decide you are going to have to tap your Roth to pay for college, you should realize that the distributions (not just the earnings, but the contributions, too) will be counted for federal financial-aid purposes," says Hurley. Advertisement Distributions from 529s, on the other hand, are not counted as income in federal financial-aid calculations, he says. So if you know you'll need to withdraw money from the Roth for college, you may be able to improve your financial-aid picture by switching the money to a 529 before the junior year of high school (generally the first year that is counted for financial aid) and investing it in a 529 then, says Hurley. For more information about financial aid, see Everything You Need to Know About College Aid. Got a question? Ask Kim at email@example.com.