Let's say your child gets a scholarship. If you've got a 529 plan, you don't need it anymore because of your child's scholarship, but there are restrictions against using the money for anything but education. Or if Shelby doesn't go to college, with her being an only child, my wife and I would have to go take some college classes with the money in a 529 plan, or wait until we're fifty-nine and a half to avoid paying penalties.
otherwise we'll have to pay taxes on teh gains as well as penalties to use that money.
- Source: Bank on Yourself: The Life-Changing Secret to Growing and Protecting Your Financial Future
by Pamela Yellen
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