Reply to College aid: Do retirement fund and equity in primary residence count?

Forum Index » Money and Finances

Reply to "College aid: Do retirement fund and equity in primary residence count?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous]PP, thanks much for these links.
My oldest is 10 years away from college. I am thinking about stashing a lot of savings in retirement accounts instead of starting a 529, and also putting some savings into house renovations. Seems like that will "shield" these assets when it comes time to apply for financial aid. Our household income is only about $110k (at the moment) so we should get some aid anyway. But I figure if we start 529s, that will just decrease how much aid we get. Does this make sense? [/quote]

Everything I have ever seen says you should save for retirement first, so yes, I think your plan is wise. If you want to maintain flexibility, put as much as you can into a Roth IRA (or any other retirement vehicle that lets you withdraw money for education penalty free).

I will reiterate the fact that the biggest factor in determining financial aid is income, NOT savings, even 529 savings. Run the simple net price calculator on Harvard's website to see. A family of 4 with a HHI of $110k and zero non-retirement assets, with one student in college, has an expected family contribution of $14,500 (at Harvard; likely higher at other colleges). That same family with "cash and non-retirement investments" of $100k has the same expected family contribution. Even as HHI rises, parents' savings and investments don't move the needle that much.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics