This is our back-up plan as well. We ended up saving more money in our child's 529 than was needed for their education. Rather than retain the 529 account for some undetermined future purpose, we'd rather withdraw the balance now and pay the taxes and penalty (which is on earnings only, not contributions). Our child can use the lump sum (after taxes/penalty) to help launch after college - buy a car, pay for rent, etc. We view it as their reward for earning scholarships and choosing a public institution for their education.We have a bunch of extra money in 529 plans (more than the amount we can roll over to the kids' Roth accounts) and our back-up plan (if we don't end up with any grandkids to transfer it to) is honestly to just take it out and eat the taxes and penalty.
Statistics: Posted by webbie90 — Mon Jan 06, 2025 4:23 pm — Replies 2 — Views 236