I have two educational savings accounts for my son, as 529 and an older Coverdell ESA totaling about $50K. He will start attending college next fall. I am thinking about the most financially beneficial approach to withdrawing funds from these accounts:
(A) withdraw a constant amount of $12500 every year
(B) withdraw the full $50K in the first year
(assuming the cost of attendance is $50000/year):
It seems to me that option (B) will be the correct thing to do, so in years 2,3,4 he will have a better chance to qualify for Financial Aid or will qualify for more aid than year 1.
Is my thinking correct?