<p>We are Americans living abroad and there is no one here who can help us with this issue. D is a sophomore at a US school on FA. I inherited a nonqualified annuity in 2011, which I was hoping to save for retirement. I'm pretty sure that when D originally was accepted to college, our IRA's were not counted by the school as available cash for tuition. I am thinking of putting some or even all of the annuity in an IRA. Are you allowed to put money in an IRA once a student is attending college and on FA? I am worried that the school would expect me to use the entire annuity amount toward her education and I don't want to tie up the funds. Any advice would be most welcome.</p>
<p>You should re-post this in the financial aid forum for more specific advice.</p>
<p>Anything that is in a formal retirment account is not counted as an investment for the FAFSA. However some CSS Profile schools will count it. Call the fin aid office at your child’s school and ask about that.</p>
<p>You also need to know about the nature of this annuity. Some can be re-styled as “beneficiary” accounts which means you need to withdraw a certain amount each year based on your age, but the principal would be FAFSA-invisible retirement money.</p>
<p>Rolling-over from one type if an account may be possible, but it should be handled automatically by the investment firms or banks. If you take a cash-out, there are time limits for re-investment.</p>
<p>In any case, FAFSA will consider only about 5.6% to be available each year if UT ends up in a non-retirement vehicle. Depending on the amount you inherited, this may not be a big deal for you.</p>
<p>There may be more to this annuity than just having it as a retirement account and the 5.6%. I will show up on your taxes as income for this year which can drastically change your bottom line if you take a distribution. Is there an option to do nothing with the annuity for now? That might be your best option. Some will make you take the money but others you can just leave it alone. It might be in your best interest to consult your financial planner and a CPA to see what this will do to your adjusted gross.</p>
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<p>Actually some Profile schools ASK for the balance in retirement accounts but there really is not a consensus that these balances are actually USED in the financial aid calculations. Folks have reported that this info is NOT included on the net price calculators for the schools which would seem to imply that these balances are not used.</p>
<p>Still, happymom is correct. If you are unsure, contact the schools.</p>
<p>Thanks everyone for all your help! I will contact a US CPA as well as D’s school. This was my first posting and I look forward to becoming a regular CC participant!</p>