Can a 401(k) impact college financial aid? | 401k Questions

Question

Asked 6/7/2007

Can a 401(k) impact college financial aid?

I currently have a 529 plan through New York State for both of my children. I have a 403b (401k for non profit). I was thinking that I would love to start 401(k)'s for my children who are 2 and 4 years old. Doing so would build nicely right up to their careers and then they can add to it as they work and instead of 30 years of growth, we would be looking at @ 50 to 60 years.

The question is, by doing this, will this impact their financial aid when they apply for college? All answers welcome, but I would appreciate some references to sites/ books that will help answer this.

Thank you.
IRA - good Idea, I guess that is the q then, the IRA will impact them at 24? Then I should put it in their name?

Answers

Answer 1/2 - Submitted 6/7/2007

I wasn't aware that you could start a 401k plan for minors. I think it is only for employees/employers to contribute funds to the employees retirement plan. You could start Roth IRA's for them, which would make sense, because then the money would be tax free for when they needed it.

The answer to the question on the financial aid is fairly simple though. Until the children are 24, they have to report their parent's income on their FAFSA's, and the savings would be included with your assets or theirs. Once they were 24, they would have to include it in their individual assets. So, depending on how much money was in the accounts, it could affect their financial aid eligibilty with the governent, which most schools look at fore determining their own eligibilty requirements.

Answer 2/2 - Submitted 6/7/2007

Here is a link that addresses your questions.

401k Related Topics

Related Questions (Ask a New Question)

Inheriting a 401

I inherited a 401 from my sister when she passed away. she would be 591/2 this march and would have been able to draw off her 401 in 2010. will i be able to draw off of this 401 in 2010 when she was able to draw or will i have to wait until i turn 591/2 which will be in2012?

See Answers

If i made 2 kids beneficiary on my 401 k. then made a will leaving everything to one. will both still get the 401 k

I put a step chld and my only child 50% each of 401 k beneficiaries when i retired. then made a will leaving everything to my only son. will the 401 k still go to both of them? if i want to change the 401k beneficiaries can i clip an addition to my will that changes the two on my 401k. or...

See Answers

Ex is benificary of 401 k and cannot get it

My ex husband passed away and his 401 k was divided with our two children getting 20% each. i was left executor of the will, as we remained good friends. he never re married. now, there is 60% of the 401 k left and the people that work with the 401k office tell me my name is on the list but they...

See Answers

Related Questions

Inheriting a 401

I inherited a 401 from my sister when she passed away. she would be 591/2 this march and would...

See Answers

If i made 2 kids beneficiary on my 401 k. then made a will leaving everything to one. will both still get the 401 k

I put a step chld and my only child 50% each of 401 k beneficiaries when i retired. then...

See Answers

Ex is benificary of 401 k and cannot get it

My ex husband passed away and his 401 k was divided with our two children getting 20% each....

See Answers

I will need to inquire about a 401 k plan that my mother owns.

I will need to inquire about a 401 k plan that my mother owns. the company is alabama. it...

See Answers

401k

I was divorced in 1986 at that time i hade a 401 in my name. according to settelement my ex...

See Answers

I am 60 and i want to pay off my mortgage with 401kyes or no?

I am 60 years old, 401 k is demenishin rapidly. should i pay off home loan befoe 401 is depleted.

See Answers

See more 401k questions

Advertise on this Site