Hi, I have a question regarding my child's 529 account. My son is 15 years old. We invested very early on in both a 4 year prepaid state tuition program and 529 account. My question is around the 529 account. Currently there is a balance of roughly 50K in the 529 account. 18K of this 50K is earnings of the account. Can I withdraw the 32K (50k-18k) without penalty right now (before my son gets to college). With his 4 years of prepaid tuition and what would be 18K balance of 529, I would like him to have more flexibility with the additional 32K that is currently in the 529 account. Thoughts?
Can't do it. Any distribution will be based on the contributions/earnings ratio as of the day of the distribution. Based on the numbers you provide, a distribution of $32k would consist of $11,520 of earnings and $20,480 of contributions.