529 savings — extra money after scholarship
MY grand daughter received a full scholarship for college. What can I do with the money we have saved in a 529 plan? I am trying to avoid paying any taxes or penalties(or at least as little as possible) on the amount (roughly $35K). Any solutions?
Thank you for your time, and keep your columns coming. Love them.
Stay safe and be well.
Terry Says
That’s a nice problem to have. Another grandchild could use it without penalty. If she’s your only one, and if you don’t need the money, leave it in the plan. She might go to graduate school! Or, when she gets married and has a baby, she can use it for your great-grandchild!
Otherwise, if you withdraw, you pay ordinary income taxes and a 10% penalty. And if you do withdraw, make sure it doesn’t lift your income level enough to impact your cost of Medicare or eliminate other benefits because this will add to your income.
