Retiring soon

I’m 63 and will be retiring soon. In retirement, I will be sending 1-3 kids through college (I started my family late!) Right now, our EFC is about $75000, so we don’t really qualify for much need-based aid. Our retirement savings include a small percentage of non-retirement equities, but most of our retirement is from 403(b), Roth IRAs, SS, and pension.

Are there any resources online or otherwise, that can help us and our financial advisor plan for the withdrawal of funds that would make our EFC more favorable? Our financial advisor says he knows nothing about financial aid and FAFSFA.

Well…I think first you need to determine how much money you need to pay your actual monthly expenses and where that is going to come from.

Once you figure that out, you figure out where that money is going to come from. If it’s from pension, retirement accounts distributions, etc, that is income (and I believe it’s unearned income… @BelknapPoint am I right). That income will be used when you do your financial aid forms.

Also, keep in mind that the FAFSA and Profile look at prior prior year tax information. So if your college student is starting college fall 2023, the 2021 tax return information will be used for the 2023-2024 academic year.

And lastly, the very vast majority of colleges do not meet full financial need for all accepted students. The colleges that DO meet full need for all accepted students are typically highly selective and competitive for admissions. Their generous financial aid is only for their accepted students and acceptance %ages are quite low.

Spend some time looking for schools that are either affordable based on what you have saved for college…OR better…look for colleges where your kids will receive generous and guaranteed merit aid. Merit aid is not income dependent.


The thing you haven’t told us is how much you’ve saved for college. Let’s say you play the shell game and get your EFC to $50k. That’s still $600k if all three attend. Are they top students? Are automatic merit awards in play?


I guess I’mtryingto figure out how to play the shell game and any resources out there with guidance.

College FAOs are smarter than you and likely your financial planners. They have seen and know just about every trick in the book. Your best approach is to figure out how much you are willing to or can pay and then identify colleges based on that. You kids’ HS counselor can recommend schools based on budget and grades. Or, we can as well. Just ask with as complete a picture you can provide. If your kids have 1450+ SAT and good GPA, ECs then they can pretty much go to school for free.

One last thought, your kids can take out loans to go to school in a pinch but you cannot to support yourself in retirement. Just remember that!


The CSS profile asks if you are not working/retired by choice. I can’t remember if the FAFSA also asks that. Also of course it is up to the colleges what they do with that answer.

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My traditional advice is not to do ANYTHING for the sake of getting more financial aid that doesn’t make sense for you in the context of your entire financial plan. And frankly, that goes double for someone who is 63 and about to retire. You didn’t mention a spouse- but even if it’s just you, you could live another 35 years… and reconfiguring assets to get another 2, 3K in aid (but potentially losing 10X that) seems like very short-sighted thinking.

The “gift” of a college education when it means that ten years later, you’ll be moving in with your grown children, isn’t as wonderful a gift as it seems.

So I think continuing to work on a solid financial plan which will cover you for the next several decades, and then determining how much of that is designated for your kids education is the way to go. Assuming no need-based aid- how much do you and your kids know about merit aid (which will be be about your kids stats, and not your financial position)? Do you live in a state with a robust set of public options? In some states- these are the best cost-effective choices-- in others, there are cheaper ways to go.

Are you in good health? Is there a spouse and does that spouse have an income, or can the spouse get a job to help “cash flow” expenses during your tuition years? Many families do that btw…


Certain pension and retirement account distributions will be reported on financial aid forms as untaxed (not unearned) income. This includes distributions from a Roth IRA. Other pension and retirement account distributions that are taxed will be included when adjusted gross income is reported.

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We were in a similar situation. I retired before our youngest started university (I still do a bit of consulting to my former employer).

One issue is that you do not want to take on any debt at all for university if this is possible. New graduates frequently make barely enough to live on, and might not quite make enough to live on (for example they might need help when a car dies). A new graduate frequently has trouble paying off student loans. Younger parents can help their newly employed kids financially. Retired parents are going to find this much more difficult.

Older people (whether parents or not) sometimes have unfortunate health surprises. Cancer or a heart attack can show up suddenly and unexpectedly. This can happen at any age, but is more likely as you get older. Again this can impact the parent’s ability to pay for university.

…and the small percentage of non-retirement equities might look like retirement funds to someone who is 65, retired, undergoing cancer treatments, and who has no pension. It apparently looks like college funds to university financial people.

In our case it meant that we needed to choose universities based on cost. In-state public universities were affordable (with merit aid making them more affordable). Universities in Canada were affordable (we live pretty far north in the US with dual citizenship, but Canadian universities are in some cases relatively affordable for international students particularly if you avoid the most famous ones). Some universities were affordable due to merit aid.

The really top ranked universities just were not affordable – the way that they compute need did not fit with our financial realities.

And more if they go for a masters degree or for a DVM.

If you have a LOT in your retirement funds you are old enough to take the money out to pay for university. However, I would be VERY cautious about this. At your age (or my age) it is too late to make the big bucks to refill our retirement funds if they run low.

To me the biggest thing is to set a budget, and insist that your kids stick to it. If they want to attend an expensive New England LAC at full pay you might need to just say no.


All good advice thus far. Don’t screw up your own ability to meet your retirement goals.

We didn’t have to play the shell game, so I don’t know much about how successful you can be. Our EFC was similar, but we have one child and saved for his education.

This may help though. Lynn is one of the brightest out there when it comes to looking at education in a realistic, pragmatic way.

And another thing…figure out your budget NOW, and set hard limits on the number after merit. That way you’ll avoid the “I’ll figure it out if you get into school X” trap.


It’s certainly possible for some people to not make optional withdrawals for a few years while you are before RMD age. If you cash in the non-retirement equities and spend down those assets then your income and non-retirement assets will be lower than if you pull money out of retirement funds. That’s not a bad approach anyway. If there’s no 529 money then you could also use loans to pay for college expenses rather than making upfront retirement account withdrawals in their freshman and sophomore years.

The question is how long that is feasible to continue (remembering that you start with prior-prior year for FAFSA). It might just about work for 1 kid (or twins). Probably not if you are paying for 8 years or so. And many colleges don’t meet full need anyway.

A more extreme version would be to use HELOC withdrawals to pay your living costs after other non-retirement assets are spent down in an attempt to minimize income withdrawals from retirement funds. That seems hugely risky especially if we are entering a prolonged bear market and interest rates are going up. There may also be knock-on effects in that larger withdrawals later on could increase your tax rates and Medicare costs.

This is exactly the kind of scenario I was referring to in my post- don’t do anything JUST for financial aid if it doesn’t make sense for your overall financial plan. I see a ton of risk here-- a kid can get a college degree by working part-time /two or three classes a semester, for example; but where are you going to live if you are underwater with your house and need to sell?

Cashing in non-retirement assets is also not free money. You’re paying capital gains tax on those funds-- not like it’s a free ride.

OP- figure out your financial plan. Then starting with your eldest child, explore merit aid, your own state’s public U system. And figure out if you’ve got an “extra cash flow” opportunity- you moonlighting? Spouse working? Going back to your own employer as a 20 hour a week consultant for the next few years???


I don’t think we really have enough information.

  1. Does this family have any college savings for the three not yet in college kids?

  2. Remember that the split EFC per FAFSA is going away. No one knows what Profile schools will do (and most schools that meet full need use the profile).

  3. Look at what Blossom wrote. Your financial plan should be your financial plan…and not with the possibility that maybe your family contribution will be lower…because that just might not work.

  4. How secure is your retirement income? IOW, what is your budget for college costs for all three of your kids with your anticipated retirement income (and savings).

  5. Stats…what are they for these three kids? SAT or ACT scores? GPA as of end of junior year? You likely don’t have this info for all three kids yet…so hard to even guess where admissions or merit aid are highly possible.


Although I agree with Blossom, I never like sweeping comments like “don’t do anything JUST for financial aid if it doesn’t make sense for your overall financial plan”. First, getting more financial aid could be part of your financial plan, especially once you know what schools they will go to and understand their financial aid. Second, it depends on the school, your financial situation, options available to you, etc. In general, I do agree with the comment, but I do think it is worthwhile to investigate. I think understanding how financial aid works is a great first step. There are some good books out there explaining the process and how things count.

How is this even within the realm of possibility for someone retiring soon with 3 kids to put through school? That’s why I MADE the sweeping comment- anyone who thinks they can predict financial aid policies 3, 5, 8 years out; I have a bridge to sell you. There are colleges today that used to have generous guaranteed merit aid for certain stats- now their awards are half what they used to be, and require essays and a special weekend. There are colleges that used to have a lower sticker price than their peer schools- which have raised tuition to be comparable. Colleges that used to be need blind that are need aware and vice-versa; colleges which allowed stacking of outside scholarships which no longer do.

Making a financial plan to support a 63 year old for the rest of his or her actuarial lifetime which relies on getting need based aid as a pillar of that plan? I’ll make a “sweeping” statement- that’s a mistake, and one from which it’s hard to recover.


Ok, I’ll respond. Let me start with an example of something I did. My child went to a meets-full-need school. I had 529 accounts for my kids which I was the owner. I made the second child the owner of a good chunk of their 529 plan money knowing it would get me more financial aid for the first child. I understood the risks involved - child 2 own’s it, they may decide not to go to college. For my case, knowing my children, I thought the sure thing of more financial aid was worth the risk. If it wasn’t for financial aid, I wouldn’t have done such a thing.

That example doesn’t apply to the OP yet, but it could. That’s why at this point I just recommend reading up on the process. We know very little about the OP. I agree at this time, before they know what school’s their kids will go to, I would probably do nothing other than educate. The suggestion to maybe spend a bit more from taxable rather than withdraw from a retirement account may be a good suggestion. They are retiring soon. It may depend on tax brackets and such. For example, they may want to withdraw to the top of the 12% tax bracket and then take the rest from retirement accounts (or perhaps do some Roth conversions). Not enough details to know.

The term financial plan is kindda vague. Different people will put different things into their plans. Some have lots of details. Some don’t. Also, financial plans can change. So, when you say “…doesn’t make sense for your overall financial plan”, I get the point of not moving money to an inferior product to shelter it. But you make it sound like you should never consider financial aid till after you have figured out everything else. Sorry, but I think keeping an eye on financial aid, especially if I think I will get financial aid, does make some sense.

This is the bottom line. We know three things. They are 63 and nearing retirement. They have 3 children, at least one of which will go to college. Their EFC is over $70K.

Not knowing the kids’ grades, how far apart they are in age, what money has been saved for college, etc., really leaves us all speculating as to the best path forward.


Private- kudos to you.

Did you know years ahead of time that kid 1 would be admitted to and attending a “meets full need” college? Likely not. That’s an aspiration, not the linchpin of a solid financing plan…

And the kind of “shell game” required for someone whose EFC is currently over $70K??? Do the math.

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I did not know, which clearly limited when I was willing to do such a strategy till my child was actually accepted (and I waited a year after that till I understood things better).

I really am in agreement with the sentiment of your comment. Many do complicated financial maneuvers in the hope of getting aid. Many of these maneuvers do not get extra aid and actually cost them money. As for the OP, their EFC is currently over $70K, but they are retiring. Income is the biggest factor in the financial aid equation. Not sure how they even got that EFC estimate, but they should estimate it in retirement.