I have more money in my plan than I'll need. I read an article that suggested just withdrawing the principal as one of the strategies to avoid a non-qualified withdrawal. See the last bullet point in the article excerpt below. Is this possible? I thought any withdrawal had to be a mix of principal and earnings? Thanks!
Strategies Before You Make a Non-Qualified Withdrawal
Since most non-qualified withdrawals are penalized, you should only do so after carefully examining all your options. In many cases, a better strategy is available that will allow you to keep more of the funds you’ve worked so hard to accumulate. Before you commit to a non-qualified withdrawal, consider the following:
Do you have other qualified expenses coming up? Paying for rent, books and supplies would be a better option for these funds and won’t subject you to a penalty.
Will your child go on to grad school? If your child is heading to law, medical or grad school, your 529 savings can usually be used for these expenses, too.
Can you choose another beneficiary? Switching your 529 plan savings to a younger child can help you save and jump-start that family member’s college savings.
Can you just withdraw from the principal? You can withdraw the amount you invested without penalty, but leave the growth in place to avoid being penalized