My daughter is looking at colleges that require both the CSS and FAFSA. I read that the FAFSA no longer looks at contributions to your 401K so we were thinking of increasing our contributions moving forward to reduce our overall income. Will this make any difference if colleges are requiring the CSS? I’m unclear how your retirement contributions are factored into your income.
School dependent.
Fafsa no. If using CSS could be no or yes. Each css school sets their own terms.
Some CSS Profile schools do ask for your contributions to your tax deferred retirement accounts. But there is no way to know if or how they use this dollar amount.
The CSS Profile is used by many private colleges and universities to gather more detailed financial information than FAFSA. The CSS Profile typically considers retirement contributions (both the amount contributed in a given year and the total in retirement accounts). Colleges using the CSS Profile often include contributions to retirement accounts as part of the income calculation, meaning that increasing your contributions may not lower your calculated ability to pay as it would with FAFSA alone.
The NPC for the school will ask for and take the contributions into account if they do use them.
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