Needs to stay in or rollover to a Roth. And frankly, I'd be having a serious conversation with him (or setting him up with a financial advisor to have it) about the time value of money, investing, and how not to be impulsive with stuff like this. Taking it and getting fined is beyond stupid.

I honestly think people don't know you can do a Roth rollover.

Why is he/she concentrating on that money and not the money they are earning?
They should have their own money and already contributed to Roth since age 18. I bet they want to 'invest' the money.
Leave it there for grand-kids. What a surprise it would be.
If you are held hostage, give them $8k cash and say that's what is left over after fees, fines, taxes.
My 19-year old is glad to have his cheap college paid, glad to work and pay some of his own college. Can't imagine him trying to see if anything is still left in 529 that he could have. He is too busy with his own life and about to double his salary.

Anonymous wrote:Either Roth or keep it in 529 for others including future grandkids. It’s your money, not your kid’s.

This. They may want more schooling later, or CE.
If not, roll it into Roth.

To be clear, the 26yo doesn't have control of the account. Assuming you established the account, you control the disbursement. It's your call, not theirs.

Anonymous wrote:Either Roth or keep it in 529 for others including future grandkids. It’s your money, not your kid’s.

Either of these options. Eating the fine is stupid, stupid, stupid.

Definately roll it over to a Roth IRA- and then you can withdrawl the principal tax/penalty free.

Anonymous wrote:Do the Roth IRA rollover.

We have $18K left over and we’re gradually rolling it over

Either Roth or keep it in 529 for others including future grandkids. It’s your money, not your kid’s.

Keep it invested. For the grandkids. $26k starting now could be enough for undergrad in a theoretical 30YR time period. It’ll probably be 2$m by 2056.

Any siblings?

Did you do things at the end of school to spend sone money? My plan would be to buy computer(s) that last year.

I can share my info so you can donate the leftover to us.

Do the Roth IRA rollover.

Can they use it to fund a Roth IRA?

M 26 year old is tempted to take the leftover ($15,000) and eat the fine.

I am thinking wait and see if he will need it in the future.

Thoughts?