If it's the last week of the month, then it's time for David Gardner to give his listeners what they want -- literally -- by answering their questions.

In this segment of Rule Breaker Investing mailbag episode, he's joined by fellow Fool -- and Motley Fool Answers co-host -- Robert Brokamp to weigh in on a conundrum that's a good problem to have. Jeff's children will soon be heading for college, which means he'll be taking the money he and his wife have invested for that purpose out of the tax-advantaged accounts where they wisely and foresightfully stashed it. Now he needs to know: Should they base how they draw down on those funds on each account's returns on investment, or are there more pressing impacts to taxes or financial aid they ought to consider?

A full transcript follows the video.

This video was recorded on April 25, 2018.

David Gardner: Robert Brokamp, how you doing?

Robert Brokamp: Just great, David Gardner. How are you?

Gardner: I'm doing really well. I don't think you or I has ever met Jeff Powell, our next mailbag item, but he does say he's been a Fool reader for years. He just started listening to The Fool podcast during his daily commute to the Pentagon, which is not far away on the VRE, the Virginia Railway Express, right by our building.

Brokamp: That is true.

Gardner: So maybe, Jeff, if you appreciate Robert's answer, you can come visit us sometime and have a cup of coffee, here, at Fool HQ.

Brokamp: We'd love it!

Gardner: Here's the question. "Hi, David. Hi, Robert," in this case. "I greatly enjoy the podcast. Appreciate the fantastic content you put out every week. For an April mailbag question, I wanted to get your thoughts on a withdrawal strategy for college savings accounts as our kids get close to leaving for school. We have both Coverdells and 529s for both of our kids. Should it be based on returns, alone, for the underlying funds in each account [cash out, for example, the lower-performing funds first, let the winners keep producing better returns until you need them]? Or are there other tax or [here comes an acronym, Robert] FAFSA implications to consider?"

Brokamp: FAFSA.

Gardner: F-A-F-S-A. Thank you. "I've been a Fool reader for years, etc. Jeff Powell and go Navy!" Robert, what do you think?

Brokamp: I should say for the FAFSA, he means the Free Application for Federal Student Aid, so basically, he's talking about some sort of financial aid. He wants to know when he comes to having both of these accounts, should he think about taxes and financial aid implications taking the money out.

First of all, Jeff, let me lay out a couple of assumptions based on what you wrote. You said you have a 529 plan. There are actually two types: the prepaid plan and the savings plan. I'm going to assume by what you wrote that you have the savings plan, not the prepaid, because if you had the prepaid, you definitely would want to do that one first.

Gardner: OK. Probably a safe assumption. Keep going.

Brokamp: And the other one is that you own the accounts, and not relatives such as grandparents, because that would change the answer slightly. I'm going to assume that you own the accounts or your kids own the accounts.

First of all, let me cover just a couple of basics about Coverdells and 529s, at least relative to your question. Both are considered assets of the parents for financial aid purposes. That means it will have a lower impact on the financial aid. The formula that is used will factor in just 5.64% of the parental assets vs. assets owned by the kids [it factors in 20%], so it's good to have money in these types of accounts for financial aid.

Gardner: Robert, did you say 5.64%?

Brokamp: 5.64%.

Gardner: You actually took it out to that extra decimal.

Brokamp: Well, you know, that's the accuracy.

Gardner: You know your stuff that well.

Brokamp: Sort of. A little bit, maybe.

Gardner: I like it. Keep going.

Brokamp: And I have kids, so I'm paying attention to this stuff. So, there's that. And also, for both of them, the withdrawals are tax-free as long as the money is used for qualified education expenses and it is not reported as income for the following year on your income tax return. They both have that in common.

The two important differences, at least relative to your question, is that the investment options in a 529 are limited basically to the mutual funds that are offered within the plan, and you can only make two changes a year. A Coverdell has a lot more flexibility. You can invest in just about anything you want, including individual stocks, and you can make as many changes as you want.

The other big difference is that the money in a Coverdell must be used by age 30, or it gets distributed, taxed, and penalized if not used for qualified higher education expenses. The only way to get around that, really, is then to transfer it to another relative who is not yet 30. With 529s, you can leave the money in there forever, in most cases. If you think you're going to be using it for graduate school, later, you can just let it grow throughout the years.

So given all that [you've got money in both accounts and you're asking what you should tap first], I would say if there's any chance that that money will stay in up until age 30, you would want to take money out of the Coverdell first if you think it's going to be in there and there's no other relative to transfer it to.

The other thing to consider is that because the Coverdell has so much more investment flexibility, I would say as long as you think you're going to use the money, I would tap the money in the 529 first, because you're basically limited to the 15 or so mutual funds that are in the 529 plan.

That's a couple of considerations.

The other thing I was thinking, though, is that if your kids are getting close to going to school, you want to be playing it pretty safe with your investments...

Gardner: And close, Robert. 16?

Brokamp: Yes, and this is an interesting question. Among the Motley Fool advisors, I would say I'm among the most conservative. For example, in my kids' 529 savings accounts...

Gardner: Close is like eight years old.

Brokamp: Not that close, but I do have a sophomore and junior in high school, so I'm playing it pretty safe in their 529 accounts these days. But certainly, by the time they are getting close to being juniors and seniors, a good bit of that should be in cash.

Now, then when it comes to deciding what to sell, that really is up to your own investment acumen to the extent you are comfortable asking which you want to sell now and which you want to hold onto for a few more years.

Gardner: And as I think about that, if I have any value to add on that particular point, Robert, it's just that looking at what you hold, I would ask myself if I am overweighted in anything, and if I am I would probably start chipping away at that, some. If everything seems to be relatively well balanced, then I would just be asking myself, "All that matters is the future, the next five years, so which are the things that I think will do the best? Maybe that will continue to grow or are less mature?"

I would probably leave those positions in place and I would be taking down the things that are more mature. So, if that's helpful at all, Jeff. If you're looking over a Coverdell with individual stock holdings, for example, that's how I think about that.

Brokamp: Right. And I'll just add one more thing, and that, coincidentally is recently on Motley Fool Answers [the April 10th episode], we covered five common myths about paying for college with a couple of experts. I totally recommend that episode if you're getting to that point where you actually have to pay for college.

Gardner: That is awesome. Robert, would you give us, maybe, your best line that was in that episode? Just an excerpt on the show? If you could just recreate your best line right now?

Brokamp: I don't have the best line, because fortunately we invited two experts from the TheCollegeFundingCoach.org. They had all the great lines. One point that they made is first of all, figure out whether you think you're actually going to get aid. There are plenty of tools on the internet where you put in the information and it gives an estimate of how much aid you might receive. Start there, and then strategize on what to do based on how much aid you think you're going to get.

Gardner: Awesome. Robert, thank you for joining in! You know, it's always going to be true on this podcast that the mailbag items are often going to come from people asking [about] real-life financial situations that I don't really speak to on a weekly basis because I'm thinking more about stock selection and where the world's headed, and our culture and technology. That's why it's so great to have you or Ross Anderson earlier -- people who are professionals every day at our company -- helping advise people on all those other things that make up our financial life. Thank you, Robert!

Brokamp: Always a pleasure!