Grandchildren not anticipated (though of course they cannot be ruled out).

Right now both he and longterm partner want no kids (😕).

These details are not to deflect the good suggestions being made, just providing more details about our circumstances.

Fine is only applied to the earnings, not the full amount.

I have always considered this the kid’s money. Part of why it was not used is that he earned merit scholarships (that well covered the 15K).

Anonymous wrote:Do the Roth IRA rollover.

The fund has to have been open for five years, so soon they could do that.

I think they are tempted because they will be graduating with (see far) no job, and would prefer to stay living in their own (with friends) rather than come back to their childhood home .

Anonymous wrote:What is a Roth rollover?

google will give you a great answer.

What is a Roth rollover?

Anonymous wrote:

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

It's pretty new in the past few years

I am guessing because these fat accounts contributed to the rapidly rising tuition rates even for the 3rd tier colleges, because parents had to spend it. Colleges will accommodate and take it. But after a while this incentive creates certain social ills.
For the kids of parents who haven't been able to establish these accounts the situation had become dire with massive college debt making them debt slaves upon graduation. It also created ultra competitive environment even for 2nd tier colleges to get into, making parenting in good school districts another level of stress and misery and overspending on extracurriculars, $$$ sports. And it likely played the role in discouraging younger generation from having kids or having more kids.

Providing parents flexibility to apply these unspent amounts elsewhere hopefully will slow down tuition inflation and other ills that come with it.

Anonymous wrote: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.

+1

Our 26 yo knows there is some left. But also knows we are likely using it to fund a siblings grad school (26 yo does not want grad school anytime soon, and we will fund theirs if needed). Otherwise leave it for your grandkids.

Anonymous wrote: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.

THis 1000%! Unless you really need it, leave it and take advantage of time/compounding

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

It's pretty new in the past few years

If they are sure they won't use it for further education, transfer to Roth:

https://www.theeducationplan.com/withdrawing-529-funds-without-penalty

My youngest is still in college, but as soon as the first started college we started the 7K max roll over each yea for each kid (time in the maket and all). We superfunded when they were born and due ot the bull market had WAY WAY WAY more than neede due to a combo o state schools and merit scolarships. All left over they can take out with the fee if they want. However no way would I allow that if they had not done the roth. However, we taught them about money early in life and this is just natural.

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

It’s a relatively new thing

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

I have done it with daughter's leftover 529. It was easy.