{Stuart Matthews here...I'm entering this post on behalf of an unknown user due to a website failure and recovery in which the original post was lost}.
So... I managed to somewhat overfund a 529 plan. The calculator wants to correctly pay for the college expenses (good!) and then drain the 529. In fact, I would like to leave the dollars in the 529 plan for potential future use for kids grad school or for grandchildren. The only thing I can think of is to create a fictional kid and have them attend school at some point in the future, but then the problem becomes that I only want to drain the 529, not necessarily fund a full education. I suppose that I can iterate this to plug in the correct figure, but that seems clunky.
So... is there a way to simply retain the unused dollars in the 529 for an unspecified period?
There are no alternatives to the trial-and-error approach in the current model of PRC. Earlier models left excess funds in the 529 account and there was no way to ever get them out, which is sort of problematic. So, the design was changed to withdraw any and all excess funds at the last graduation, but this may not always be the right approach either, as you've pointed out. I'll consider an enhancement for the 2022 model.
Hi Stuart, I noticed that 529s are all drained in the PRC2023 gold. Are you still considering an enhancement to specify 529 in the order of withdrawal ? Also, not clear to me if current method assesses tax penalty for non-education use of remaining 529 funds.
Yes, we may allow for inclusion of the 529 plan in the withdrawal order table in the 2024 model. Non-education use of any remaining 529 plan balance is treated as ordinary income when calculating taxes.
Stuart
