You Have More Than One Choice for Withdrawals

For multiple accounts with the same beneficiary, take funds from one, some, or all

If you own more than one UESP account for the same beneficiary, you now have two choices for how you withdraw funds.

Thanks to the Protecting Americans from Tax Hikes (PATH) Act, enacted in December 2015, it’s no longer necessary to take withdrawals proportionally across all accounts for the same beneficiary.

You can still withdraw funds proportionally from all of your accounts. But now you also can choose the account (or accounts) from which you want to withdraw funds. With this new option, the earnings portion will be calculated on an account-by-account basis, easing your recordkeeping requirements.

Here are examples of both processes.

Proportional:

You own two accounts for the same beneficiary. The balance of Account 1 is $4,000 and the balance of Account 2 is $6,000. The combined balance of both accounts is $10,000. You wish to withdraw $1,000 from the accounts.

Since 40 percent of the combined balance of $10,000 is in Account 1, 40 percent, or $400, of the $1,000 withdrawal will come from Account 1. Similarly, 60 percent of the combined balance is in Account 2, so 60 percent, or $600, of the withdrawal will come from Account 2.

Choose an account(s):

You own three accounts for the same beneficiary. The balance of Account 1 is $4,000. Account 2 has a balance of $6,000, and Account 3’s balance is $3,000. The combined balance of the three accounts is $13,000. You wish to withdraw $1,000.

With this option, you can withdraw the $1,000 from one, two, or all of your accounts, in whatever combination you think best suits your investment goals.