Personal Investments • Re: Do Young Retirees Stay Aggressive?

Klang

My income will be low, my savings high. 2 million in my name precludes financial aid.

What would you do instead of 529s?

OP,

I don't understand why are you putting money into the 529s if you are retiring early. Is your goal is to make sure that your kids don't qualify for any financial aid even when you have zero income?

KlangFool

myartman,

"2 million in my name precludes financial aid."

Not true. Money in the tax advantaged accounts other than 529s are not counted.

"What would you do instead of 529s?"

1) Max up all other tax advantaged accounts.

2) Keep it in the taxable account. You can use this money to pay off the mortgage before you retire. Then, it will not be counted.

https://studentaid.gov/help/asset-net-worth
"Assets include

money in cash, savings, and checking accounts;

businesses;

investment farms;

real estate (other than the home in which you live);

Uniform Gifts to Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA) accounts for which you are the owner; and

stocks, bonds, certificates of deposit, etc.

Assets don't include

the home in which you live;

UGMA and UTMA accounts for which you are the custodian, but not the owner;

the value of life insurance;

ABLE accounts; and

retirement plans (401[k] plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.).
"
And, if your income is low enough, you do not have to report asset at all.

https://studentaid.gov/help/simplified-needs-test
"The Simplified Needs Test allows the student to have assets excluded from consideration when we calculate the Expected Family Contribution (EFC). Based on answers to certain questions on the FAFSA form, the student may be able to skip the questions about their assets.

Note: Some states require asset and income information to determine eligibility for state aid. If the student is a resident of one of those states, we’ll ask them those questions regardless of their eligibility for the federal Simplified Needs Test. If the student isn’t a resident of one of those states, we’ll ask the student if they want to skip the questions.

Some schools also require students to complete those questions to determine eligibility for institutional aid. They should check with the schools they’re applying to before they decide to skip those questions.

Providing all income and asset information won’t negate their eligibility for the Simplified Needs Test."

KlangFool

Statistics: Posted by myartman — Sat Jul 06, 2024 4:16 am