<p>Looking for some guidance, am posting both here and in finaid.</p>
<p>In the asset portion of the FAFSA it says do not include value of pensions and life insurance. Well, my husband died in the past year, and the money that is in my investment account is all life insurance money.</p>
<p>It also does not ask me for pension income (although it does ask me for total income on my 1040.</p>
<p>Is there a way to indicate that this stocks are actually life insurance and that I am now retired? This is a new thing for us this year and we are completely lost.</p>
<p>First, my sincerest condolences on your loss. I'm sure this past year has been very hard on you.</p>
<p>When it says, "Don't include the value of life insurance", it means don't include the cash value of the life insurance *policy<a href="if%20it's%20whole%20life">/I</a>. It doesn't mean "Don't include the proceeds from a life insurance policy."</p>
<p>The FAFSA asks about your occupation, doesn't it? That's where you would indicate "Retired." And it also asks how long you've been widowed. Both these things will help.</p>
<p>Then, once you've submitted FAFSA to the various schools, you can write to them with these "special circumstances". You can also indicate them on the CSS Profile for those schools that require it.</p>
<p>I am sorry for your loss. I am afraid there are not really any special treatments for being retired. FAFSA asks for untaxed SS retirement income on one of the worksheets so that it can be added to the income from your 1040 for FAFSA purposes. If it is taxed retirement income it is already included in the 1040 as income so is not asked for seperately. It is not treated any different to any other income by FAFSA.</p>
<p>Where it says not to include the value of life insurance I believe it means policies you have that are not paid out. If the policy has been paid to you you have to include it.</p>
<p>To be excluded from assets as retirement savings the money must be in a retirement account such as a 401k or IRA. </p>
<p>There is an amount of asset protection in FAFSA that is based on age. That will protect some of the assets but not a lot. Are you able to file a 1040a or 1040ez? If your income for 2007 was under $49,999 and you are able to file a 1040a or 1040ez you would qualify for a simplified needs test in which case non of your assets would be considered by FAFSA.</p>
<p>The other possibility is to file FAFSA then ask the financial aid office at your school if you have any grounds for a special circumstances adjustment. I do not know if there would be something that covers your situation but you should ask. Good luck.</p>
<p>Thanks. No, I dont see where it asks for my occupation, but I will check again. I think that I will have to fill it out as best I can and then send a litter to the school (unusual situation, we are only looking at one school)</p>
<p>It does ask me if any money was from salary (which it is not) perhaps that incidates retirement. Sigh.</p>
<p>Thanks, I am going to look again at the form and see if I missed something. I am not yet fifty nine but I am retired.</p>
<p>I dont think that I can file for the a or for the ez because I have interest income from Schwab, I will have to see. My income is less than the amount you specifiied. Thanks for your help. I will keep exploring.</p>
<p>You can file an ez with interest income $1500 or below. There are all sorts of things that may prevent you from filing it - capital gains from sale of stock, State tax refund from previous year if you itemised (I am still whining about that one - could not file EZ last year because of a small State tax overpayment - made very sure we could file it this year) etc. But if it is possible it may help you out. You cannot itemize deductions on the ez but if you are able to file it it may be worth playing with the numbers to see whether the financial aid benefit would (or would not) be a better deal than itemizing. Have you run your numbers through one of the EFC calculators to see what your EFC would be?</p>
<p>The question about earned income is used to calculate an allowance for social security tax (though why they do not ask for the actual SS tax paid is a mystery to me) and also income for people who are not required to file taxes. I don't think it has any other affect.</p>
<p>quiter 51
I am so sorry for you your loss. Please be aware that you are in the position to explain your situation to the financial aid office of your child's top choice school if your child does not receive an acceptable level of financial aid. Last year a friend was in a similar situation and financial aid packages varied wildly with the most generous sensitive to the extenuating circumstances. My friend was able to negoitiate a very generous aid package at an IVY once the offers were in. Best of Luck to you.</p>