To get right to the point, I'm very happy with my current investments, debts, etc. Maxing out TSP to the tune of 54K this year (due to working in a combat zone) and also have maxed Roth IRAs for myself and my wife. No debt other than the condo we rent out.
So here's where the question comes in. My grandmother passed away a few years ago, leaving my parents (who were born Mustachians) what must have been quite a bit of money, because now they are giving it away to their kids, 10K per year per person. I can find plenty of places to put the 10K for myself and my wife, but I recently had a baby. I just found out that my parents intend to do this for my 4-month old every year as well.
THIS IS AWESOME, but I'm not quite sure what to do with the money. I want it to be for him and his future, so my first thought is 529 for college expenses. But I have already transferred the post-9/11 GI Bill to him. I maybe will have one other kid, but certainly not more than two total.
This is an awesome problem to have, but I fear that will be TOO much money for a 529, especially if they give that kind of money to a second kid as well. My fear of incurring 529 10% withdrawal penalties is pushing me towards simply investing the money in a taxable account and calling it a day. What do you guys think? What would you do? I know there are exceptions for the 10% penalty, so am I over-worrying? Any thoughts/advice are greatly appreciated.