Full Pay can kick in at lower incomes than you might expect!

@NCKris I don’t think people can do that. HAve all of that savings and go part time and get a full ride. Non-retirement savings is considered at something like 5% so, if one has $1MM in non-retirement savings, that’s $50k expected for tuition for one year. It doesn’t matter if there’s any income. My brother in law is retired at the age of 45 and has a large nest egg. No income. He will be full pay.

@homerdog $1 mil can easily be in a protected retirement account.

I personally know of few families who have done this, and we live in MCOL area. I did not say both parents quit their jobs, they either go to 1 income or both do PT jobs, which more than cover their expenses. But yes, this would work if and only if the kid can get into HPSM, who do not consider home equity.

“Is that really that common or doable?”

Common, no. Doable, yes, but only in specific circumstances. If you are self-employed (especially as a consultant) you can control what you take as income while having your company pay for healthcare and even contributing substantial amounts to a pension (which isn’t considered income for FAFSA/Profile purposes if it’s set up as a non-contributory pension, just like an employer’s final salary pension contributions for public employees). And you can make sure essentially all your savings are in retirement accounts. If you previously earned a lot and paid off your mortgage you can live on the home equity for a few years. But for most people it’s too much trouble.

@itsgettingreal17 Really? How? We couldn’t move $1MM+ savings from investments into a retirement account. If we could have done that, we would have. We’ve always maxed out our 401Ks but the rest of our savings is in investments that cannot be turned into retirement accounts. There’s only so much that is allowed to be saved per year in official retirement accounts.

@Twoin18 seriously, if you know how to do this, I’d like to know. We have a financial adviser and he told us there was no way to move our investments into retirement accounts that would be protected.

"Doable, yes, but only in specific circumstances. If you are self-employed "

Yes, for the self-employed it isn’t that challenging to find ways to manage one’s reported income in questionable ways and yes it gets done but that’s a very different scenario than what was presented.

" $1 mil can easily be in a protected retirement account. "

@itsgettingreal17 - But then what are they living off of if they quit their jobs pre-retirement age?

@homerdog I don’t understand why you are so shocked that a married couple could have $1 mil in 401ks. Not that hard at all. Do the math.

@itsgettingreal17 I know it can be done. We have it. But we also have that amount outside of retirement. So if we quit our jobs then we’d still be full pay.

I think most people who were able to save that much in their retirement accounts also have sizable investments outside of retirement accounts. Even if they have $500k in non-retirement savings, that would be $25k expected from savings. Add in a house that’s paid off and that goes up.

High earners can’t even open Roth IRAs. There is a cap on income in order to contribute.

Backdoor Roth.

But Roth IRA yearly contributions are so small. Not going to make a dent in living expenses or paying for college. This whole thing is silly. Anyone with a high paying job and seven digit savings should be smart enough to know that cheating the system just cheats them in the long run. No way that some of the decisions above (to work part time, etc) are good financial decisions.

I agree, not a wise financial move. I was just trying to think of some way a person could get by with all their assets hidden.

MODERATOR’S NOTE:

I’m not sure how this ties into the OP, but I suspect it’s not applicable to most users and for any users who can/do do this, I assume they have a financial adviser to help plan. So let’s move on from these details, or move this part of the conversation to its own thread.

And discussing effective ways to hide assets is certainly not the purpose of either this thread or this site.

It may be doable for a small number, though they’d have to do it before middle of sophomore year (or junior year) of HS and the kid has to get in to a meets-full-need (likely need-blind) school. None of those are that easy to get in to. Seems pretty chancy.

Seems that moving to a state with good publics and paying in-state tuition (or move to FL/GA and qualify for those full in-state tuition merit grants/scholarships) is a less risky plan if you’re going to quit work for a few years anyway.

Or just consider cheaper unis abroad, wherever you live.

Anyway, it’s a free country. Nobody is forced to work or is foced to live in a certain state and everyone can try to do so if they want to.