Living off campus expenses and when money is needed

[rablack]

For clarification in this piece, would the money be readily available to the student when it came time to pay rent and/or purchase groceries? It states to "add up the receipts from any rent, utilities, groceries or other housing expenses each year until you reach the maximum amount for a tax-free 529 plan withdrawal." Does that mean that the student would need to have their own money available to purchase groceries and pay rent for when it is due, or will the money be taken from the 529 when these things are needed?

https://www.savingforcollege.com/article/using-your-529-plan-to-pay-for-room-and-board

[mark]

They do not need to have their own money available.

You can withdraw the money any time from a 529 during a given year for expenses for that year. In fact, I don't think anything is stopping you from withdrawing everything you need for the year on Jan 1 (other than most institutions are closed on New Years Day). .

[rablack]

So whenever money is needed from the 529 to pay for rent/groceries, the student can just pull it out whenever they need?

[mark]

Yes.

In order for the withdrawal to a be a qualified withdrawal (no penalty or taxes), the total you take out should not exceed the COA for room and board. In my child's case, he spends more than the COA,. I just take out the whole amount (COA for room and board) for the semester, put it in my bank account, and slowly give him the money. I automatically transfer him the rent money on the first of the month. Then I take the total left, divide the amount by the number of weeks in the semester, and automatically transfer that amount to my child once a week for food. I told him if he needs anything in addition to that amount, he needs to get a job.