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Roth IRA for student - impact on FAFSA

brainomaticbrainomatic Posts: 163Registered User Junior Member
My sister-in-law told me her son (a high school junior) has some savings in a Roth IRA. How does that impact EFC on a FAFSA? Is it different if it is in the student's name versus parents?
Post edited by brainomatic on

Replies to: Roth IRA for student - impact on FAFSA

  • entomomentomom Posts: 23,662Registered User Senior Member
    Money already in retirement funds such as a Roth IRA don't count towards ASSETS in figuring the EFC for either parents or children. However, any money being put into a retirement fund will count towards INCOME for that year, for either parents or children.
  • AnotherMom2009AnotherMom2009 Posts: 113Registered User Junior Member
    If the IRA is not deductible, it is already counted in income. Therefore, there is nothing to "add back."

    Also, only the wage earner can contribute to his/her own IRA; therefore, it would not be possible to put a child's IRA into the parents' name.
  • entomomentomom Posts: 23,662Registered User Senior Member
    another, I agree that an IRA has to be in the earner's name, but it's not true that "only the wage earner can contribute to his/her own IRA". It is ok for a parent to contribute to a Roth in the child's name up to the amount that the child has earned (and below the maximum contribution).
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