am I overreacting

I just had my daughter February 13. My sister is now pregnant and is giving birth in late September. We were talking about how are kids would be so close in age and what her and her boyfriend hope they have(they'll be finding out in about the next month) we'll her boyfriend asked if our kids will be in the same grade once they start school. We told him no because the school cut off date is you have to be born before the end of august to start preschool at 3 years old(not sure what it's like in any other state but that's how it works in our state). So my sister got a little sad and told me that so our kids could be in the same grade for my husband and I to hold our daughter back so our kids can be in the same grade together. I told her hell no! I'm not holding my kid back just so they can be together. Now my sister and I are 4 1/2 years apart and have never been in the same school together. When I was a senior in high school she was in her last year of middle school(8 grade). I told them I'm not willing to hold my daughter back in school so she can be with her cousin. My husband and I would only hold her back if she wasn't learning what she needed to. My sister got a little pissed and ended the conversation there and moved onto another topic. I don't believe I'm in the wrong for this but am I overreacting?