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][quote=Anonymous]This is a little different but the financial guy at my bank told my that unless you fully fund a 529 you shouldn't do it.  It counts as an asset.  So if you save as little as $50,000 you could end up not qualifying for FA.  And as we all know $50,000 will barely make a dent.  I had never heard of this or thought of this.  I'm going to talk to my actual financial planner to confirm if this is true.  The guy at my bank said I should open a SEP IRA (I'm self-employed).  It does not count as an asset and you can pull from it, tax free, for educational purposes.[/quote]

It counts as an asset, but it generally decreases your award only by about 5-6% of the account value, so if you save $50,000, [b]it would reduce your award by about $3,000.[/b]  [/quote]

EXACTLY. This cannot be said often enough. It is crazy to choose a strategy of NOT saving for college in order to maximize financial aid. Would you rather have $50,000 in the bank and an annual expected family contribution of, say, $23,000, or have $0 in the bank and an expected family contribution of $20,000?

If you truly can't afford to save for college AND retirement, you should save for retirement. If you can afford to save for retirement AND save at least something for college, it is wise to do so. Deliberately avoiding saving for college is not a sound financial strategy (assuming you intend to pay for some portion of your child's college expenses).[/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