When you said "a small 529 for my kids that we won't need for college" I thought you meant "they got a full scholarship" or "they aren't going to college" (rereading I see it's "young kids").Yeah, I doubt they'll earn much in high school so will just plan on depleting the 529s on qualified educational expenses during my oldest's freshman year. My guess is we'll have $200k+ in college expenses but the 529 benefits just aren't there for me to deal with the strings and/or penalties.
If you have qualified educational expenses and a 529, use the 529 to pay the qualified educational expenses.
The only other use for a 529 is to start building an educational legacy for grandchildren.
It is very nice to get investment earnings for 18-years with S&P500 index funds in a 529, and take it out completely tax-free to pay for educational expenses. Much better than 20% LTCG + 3.8% NIIT + CA income tax on a taxable account.
Statistics: Posted by ccieemeritus — Sat Sep 28, 2024 9:28 pm