Reply to If your kid doesn't spend their 529, what will you do with that money?

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Reply to "If your kid doesn't spend their 529, what will you do with that money?"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I think this depends a little on whether you have extra because you ended up able to cash flow some expenses (but can still withdraw from the 529 tax free) or whether you saved more than the total cost of all your expenses. [/quote]

OP here, if he picks one of the automatic scholarships, then the total cost, even if we provide all his spending money, will be less than the amount in his 529, by more than the $35K he can roll into a Roth.  [/quote]
I think the Money and Finances forum is a better place for this question, OP.[/quote]

I'm not asking what we're legally allowed to do.  I know that.  I'm really asking if people think of it as the kid's money, or as the parents' money, or as something else. Or is it something in between?

For example, if I think of it as my money that I was willing to give to him for college and no other purpose, then I could turn around and tell his brother he now has a bigger budget, or I could give it over the years as Christmas gifts to my nieces and nephews. Or I could fund my own Roth.  Or I could withdraw it, pay the penalty, and renovate my ktichen.

On the other hand, if we think of it as his money, then can he withdraw it, pay the penalty, and make a down payment on a house. Or he can withdraw it, pay the penalty, and become a ski bum.   Or he can save it for his kids, or his eventual spouse to go to college or grad school.  My financial advisor also says he could use it to purchase a car to get back and forth to campus and internships, and then he'd still have it after graduation.

Or is there a middle ground where I say first we see if your sibling needs it, then the rest is yours.  Or, we keep it in the 529 to be split between all the grandchildren I end up with.  Or you can withdraw it for a down payment, but not for skiing. [/quote]

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