Not sure if I should ask this in the old 529 thread or maybe start a new one, but I've never seen much discussion on actually using 529 plans when the time comes. So, stupid questions incoming.
Scenario:
-- Boy is starting college this fall. We have just about the right amount to cover 4 years tuition/reimbursable living expenses.
-- He enrolled in a 5yr combo undergrad and MBA program. I hope he loves it and sticks with it, but okay if he changes his mind. We can make that fifth year happen from other sources if need be.
-- Because the last couple of years were crappy for his 529, we've been pumping some extra into it to get it to where we wanted it.
-- Younger brother is in the wings (3 years out) but due to the extra time and some better breaks, his 529 is looking just fine unless he picks somewhere ridiculous.
I had always just assumed that when he started, we'd stop contributing to the 529 and shift that monthly investment partially to spending money for him and other long term stuff. But if he does this 5 year degree plan, I started thinking we'd keep contributing. I don't think that it's going to necessarily grow that much over the next few years, but it seems that gives a little more tax-free growth and would then cover his fifth year. Since we're in Texas, we don't get any further tax benefits, whereas I'd seen some other sites recommend to keep contributing while your kid is in college primarily for the state income tax break if available.
So now I'm thinking we'll just keep contributing for the next year or two and then re-evaluate. I figure by that point it will become more clear if he sticks with his 5y program or if he wants to do some other kind of grad school, so that will give him some extra flexibility. If he decides to just do a 4 year degree we'll roll anything left into a Roth for him or start saving for future grandkids. If it takes him 5y to get his undergrad degree we're not pissed at him and he doesn't feel bad. If he decides to drop out and become a ski bum/whitewater guide we'll take the penalty and buy ourselves something cool and lord it over him.
Anybody have any experience in this regard or thoughts? I am a financial idoit and not good with teh monies.