Using MEC to shelter assets, pay for college

politeperson
Thu, 22 Jul 2021 02:42:20 +0000

thumper1:

politeperson:

, the best place to “shelter” savings from aid calculations is in retirement accounts

Remember, the financial aid forms will add back in as income any contributions to tax sheltered retirement accounts you make. So what retirement accounts would offer significant shelter? There is a dollar limit to what one can put in a Roth IRA annually.

For parents who have been maxing out retirement savings for decades, I would say the shelter is pretty significant. Sure, employee contributions made during the relevant years are added back in on the financial aid forms. Employer contributions are not, often including S Corp contributions to pension plans such as a SEP.

My point, though, was that the three most significant asset areas in which one can shelter assets from financial aid do not include insurance products.