New here..seeking advice

happymomof1
Fri, 15 May 2009 17:41:03 +0000

One important factor to remember is that FAFSA doesn’t include retirement savings (IRA, Keough, 401(k), etc.) as being available to pay for your children’s education. Money in bank accounts and brokerage accounts is considered to be available. If you haven’t maxed out your IRAs or your husbands retirement funds, you have time in the next couple of years to shift money that is currently in a visible-to-FAFSA location, to an invisible-to-FAFSA location.

The CSS-Profile will look at those retirement funds, but most colleges and universities only use the FAFSA.

As for specific investment vehicles (stocks vs. bonds vs. CDs vs. savings-type accounts), the standard recommendation is that any money you will need in the next five years should be in a conservative investment. Some 529 college funds automatically shift investments from stock/bonds to CDs/Money Markets about two years before the student would be expected to enroll.

I first ran the calculators when Happykid was in 9th grade. I ran them again in 10th grade, and had to accept that that huge figure is the figure the colleges/universities will expect our family to be able to pay. Knowing how much the colleges/universities will expect, and knowing how much we consider to be actually do-able means that Happykid can go into the college application next fall fully informed. Her list will be a financially realistic one. No “I just found out that I can’t pay for my dream school” threads will be started from our household.