<p>Question - As a parent I received an inheritance, it was suggested by our employer provided financial person that I did not have enough in retirement so I should set up a 457B for this past year. Now looking at the profile I think I am in trouble because I had over 25000 taken out of my pay (reducing my wage and tax responsibility) and used the inheritance to live on and also paid down my mortgage. From previous threads and information it looks like they would view this as available monies for tuition. Now for next year, I don't know what to do - any suggestions on how to explain this.</p>
<p>Are you asking whether your deferred income or your inheritance will count towards available monies? My understanding is that your income, with or without deferment for retirement will count towards one’s expected family contribution. I think the inheritance will be calculated as an asset. For example, your house that you paid down, is an asset that can be used as money for retirement. Many more informed posters than myself can correct me or give you more information. Of course schools that require the CSS profile may all calculate your income/assets differently. </p>
<p>Please, make sure you continue to save for retirement. No one will give you loans to retire.</p>
<p>GTalum is correct - money put into a retirement account on a before-tax basis gets added back in to compute your contribution. So from that aspect it doesn’t matter whether you contribute to the 457B or not - the total considered by the Profile will be the same.</p>
<p>Since you paid less in taxes because the retirement funds were pre-tax, this will have the effect of raising your EFC a bit.</p>
<p>Also consider that most schools do not count retirement assets (there is speculation CSS Profile schools may count some of it if they think you have over-funded your retirement, but that doesn’t sound like the case here). So by putting $25K in a retirement fund and using other savings to live on, you have in essence reduced your assets counted by the schools by $25K.</p>
<p>Equity in your home is counted differently by different CSS Profile schools. Some don’t count it at all, some cap the amount in various ways, some don’t cap it. You will have to check with each school to find out how they count it.</p>