Taking money out of 529 plan for high school

[Anonymous]

My DD is a rising sophomore at a private high school. We paid for freshman year out of pocket and planned to do the same for the next three years. Now we’re worried that the economy is going to crater and her 529 Plan will take a major hit right before she starts college. We’re thinking of taking $10,000 (the maximum) out of the 529 for high school and placing what we would have paid in a savings account. Is anyone else thinking of doing something like this or making any other efforts to protect their kid’s 529 money?

[Anonymous]

Standard warning about trying to time the market.

529 money doesn’t have to be in stocks. There are typically multiple choices, including money market and bond funds. You could reallocate to a safer mix within the 529 without distributing anything now. This is pretty common anyway for people getting close to college.

[Anonymous]

If money was ever a problem, you should have stayed out of 529. The deduction and tax free growth do not make up for the losses you suffered already.
You also missed out on investing on your own and learning daily how it's done. Yes, take it out.

[Anonymous]

Starting in 2026 you will be able to take $20k

[Anonymous]

Anonymous wrote:Standard warning about trying to time the market.

529 money doesn’t have to be in stocks. There are typically multiple choices, including money market and bond funds. You could reallocate to a safer mix within the 529 without distributing anything now. This is pretty common anyway for people getting close to college.

This is the answer. You can remix into fixed income and interest bearing within your 529 if you are really that worried. That said, I also agree that it is impossible and somewhat futile to try to time the market.