Yes, D18 got a full ride and has about $100K extra left in her 529. We gave her some cash that we would otherwise have contributed for her younger brother and transferred that amount to his 529. The new tax law will also allow us to put $35K in her Roth IRA starting in 2024.
But we are in the process of withdrawing some money to help pay her living expenses now she’s graduated (she is a ballet dancer with minimal income).
My key conclusion is that it’s a bad idea to withdraw while your kid is in college if they would be subject to kiddie tax (your tax rate on unearned income, which 529 distributions are). That will be the case unless they have a high enough paid summer job to be providing more than half of their own support (remember the scholarship isn’t counted so their total support may be quite limited and earning $5K+ in the summer may be enough).
The year they graduate it is likely they will provide more than half their support if they start a job promptly. That’s a good time to withdraw money because their effective tax rate will be low. If not then opt for the next year after when they are not in full time education for at least part of five months.
It is not fully defined whether you could avoid the 10% penalty on post college withdrawals. Tax programs like TurboTax will assume you need to pay this. On the other hand, the recent law change to allow Roth transfers suggests that Congress doesn’t necessarily intend for later withdrawals to be penalized. Basically the law and IRS are silent on this, so it’s at your own risk. I haven’t decided yet (we just made the first withdrawal this month) but her tax rate is otherwise going to be minimal.