<p>I would be very grateful if someone could give me the answer to this:</p>
<p>My son who will be applying to colleges next year. We will be applying for financial aid and while our income is low, I have an IRA that is big enough to make it possible that we would be turned down. We have talked to an advisor, College Planning Experts (collegeplanningexperts.com), who is telling us we will have to disclose the value of my IRA on whatever forms are required for asset disclosure -- for private colleges, but not state universities. However, the guy at CPE is also telling me that if I buy an annuity (which they conveniently sell, for big up-front fees) the annuity IRA can be omitted from disclosure.</p>
<p>What are the rules for disclosing IRA assets to college financial aid offices? I'm 67 years old, if it matters.</p>
<p>Are annuities exempt?</p>
<p>And what does anyone think of College Planning Experts?</p>
<p>Thanks a lot.</p>
<p>JF</p>
<p>For FAFSA, which all schools require, you do not have to report IRA as an asset at all (current year contributions do not reduce income however). For schools that require CSS profile you may have to report it (not sure) on CSS but it may or may not have an impact depending on the school. Only about 300 schools in the country require CSS, not all private schools. </p>
<p>Personally I am always very suspicious of financial advisers who are selling a product.</p>
<p>Run quickly away from these guys. As far as I know any 401k or IRA does not count as an asset or effect your EFC for either the FAFSA or Profile. It sounds to me like they just want to sell you an annuity. Never change your retirement investments for Fin Aid purposes. </p>
<p>Any contributions to a 401k or IRA in a particular year are counted as income and will raise the EFC, but I don’t believe balances have any impact at all.</p>
<p>These don’t sound like useful financial counselors – they sound like annuity salesmen who are trying to get you to buy their product. Run, don’t walk.</p>
<p>And please consider filing a complaint with your state insurance commissioner if what they’re suggesting you buy is a fixed annuity, or the National Association of Securities Dealers if it is a variable annuity or to both if it is an indexed annuity. What they’re telling you is flat out wrong and needs to be stopped. NASD has significant restrictions on what salesmen are allowed to represent, and most states take a pretty dim view of this kind of behavior as well. This page from investopedia has some good links at the bottom:[Watch</a> Your Back In The Annuity Game](<a href=“An Overview of Annuities”>An Overview of Annuities)</p>
<p>There is a parent, Taxguy, who has mentioned these annuities. I don’t know much about them. As a person who does not know much about the more complex investment strategies, one rule that I follow strictly, is that I do not invest in something I do not understand. And understanding how something like that works does not mean understanding how the salesman explains it works. </p>
<p>If you want to invest in ANYTHING, you really should research it on your own, discuss it with several people who are knowledgeable about the investment. Don’t take the salesman’s or a company’s, or an investment house’s word on the matter. You should understand it very well. And getting info from an internet board doesn’t count. You can pm Taxguy and get a nutshell explanation to get started on your research.</p>
<p>I can tell you that it is true that many colleges, particularly those who use PROFILE and/or their own applications, will ask you for your IRA, 401K and other accounts that are not included calculating the FAFSA EFC. Whether there exists an annuity or other investment vehicle that legitimately does NOT have to be reported on those forms, is possible. I have heard of such a thing. Has to do with insurance, could be an annuity, or cash value sort of thing with insurance, but I really don’t know beans what it is and what the risks and limitations of investing in such vehicles. That is something you need to research very, very carefully.</p>