How Solo 401k Plans an IRAs Affect Financial Aid

Solo 401k plans and IRAs can affect various forms of financial aid in the following ways:

Student Financial Aid

When applying for financial assistance from the U.S. Department of Education Office of Federal Student Aid, an applicant is required to report many types of assets (the parents’ and the student’s). Those applying may wonder whether retirement savings accounts are included in these reportable assets.

Balances in solo 401k plans and IRAs, whether owned by the parent or the student are not included in the calculation.

HOWEVER,  any contributions to a solo 401k plan or IRA for the tax year of which asset information is gathered are counted. See the instructions for completing the FAFSA  application for more on this.

Distributions from solo 401k plans an IRAs that are referenced for FAFSA will also count as income. See the following.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>