Nope - you have to add back 401k contributions and deductible IRA contributions made. The government isn’t going to subsidize your retirement savings.
as it should be… . it seems they do not list this at all on the Tax transcript …only the adjusted gross income.
We don’t do our taxes (used to until they started going to college -then I got worried , what if we make a mistake & it holds us back from doing the fafsa)…
So then…we never go by line 1 on the W-2 form…(which is pretty much Adjusted Gross- for us anyway)… but line #18 on the Form W-2 …
I actually feel bad that we are lower income… like we should be ashamed of ourselves…some would think we are leeches on society…this many kids…and we don’t make over $100,000. what is wrong with us… We don’t get food stamps or any Gov help though… but do qualify for reduced lunches for the kids…
We live in a depressed area, lots of unemployment, people struggling to pay their bills…most of our friends, family earn less than we do even…I grew up in a blue collar family, so did my husband … back then College wasn’t the necessity it is today… but it kills me… because so many we know , even after going to college are just working at a Target or some lower paying job -strapped with all this debt…
Isn’t this a major crisis… there is not enough decent paying Jobs for all the college Grads?? any threads like that here ??
1st son just got a job that requires the bachelors degree he has… starting out at $11.50 an hour… Oh he’s not complaining… but we also know someone, his friend, no college (well he quit, couldn’t handle it)…who just got a job at a temp agency earning $12/hr in the same area… they were joking about it not too long ago…
I did the calculator one more time with our income on w-2 as $ 64,465 … and got :
Well, hopefully when the school pkgs his FA, they will add in some 'extra merit" like they did with S2. I think you mentioned S3 has better stats.
I would suggest that S3 retake the SAT and ACT in hopes of better scores (practicing those weak sections)…better scores could mean a few thousand more in merit.
As for your concerns about jobs for college grads, much can depend on major and career goals. And, even if a College Grad has to start at a lower rate, if the job required a degree, then likely there is room to move up. Many companies won’t even promote those w/o degrees. That’s why you often see adults w/o degrees scrambling to finish degrees thru night school/online so that they are eligible for promotions.
It looks more equal for married and single now. Strange changes.
There are good jobs that do not require 4 yr degrees and do not require significant levels of debt to earn the required 2 yr degree. One of our adult children earned her COTA (certified occupational therapy assistant) through a 2 year Allied Health program and she is employed full-time making an income above the US median income with only 1 yr of experience.
Students do need to understand that it takes more than going to college and earning a degree to be employable. It takes marketable skills, job experience/internships/research, etc. They need to make sure that they do more than simply attend classes during their 4 yrs of undergrad. It often takes more than that additional part-time job. It requires experience in their field. At graduation, employers have lots of grads to interview. The students who have experience plus grades are going to stand out above those who are relying on their degree. I’m not saying that is what your oldest did, but future employment does require planning and strategy. Students need to pursue every opportunity to make themselves marketable to future employers.
For your 2nd ds who has decided to major in chemistry, he needs to understand what a BS in chemistry means in terms of employability. What jobs will he be able to get with a BS? What is the avg income? Where are those jobs located? There is no reason to graduate with a degree and then be surprised by the job opportunities available. It requires due diligence up front.
Our family lives in a very practical world. Our family’s college goals are employment which provides self-sufficiency. We want our kids to pursue fields which they will enjoy, but they need to understand up front what that career is going to mean for them financially. If they want a different lifestyle than a certain degree will provide, they are the ones who need to reconsider. The market is not going to easily accommodate mismatched outcomes.
THe way FAFSA works is a little different for those who qualify for simplified assets, which you may since you said your children qualify for free/reduced lunch. You do put in AGI, then add back in the 401k contributions, but that doesn’t seem to affect the Pell grant amount. I don’t think you can calculated it perfectly on the NPC. You may be able to do it on the FAFSA worksheet.
Truth is… I was very upset with 1st sons choices after college… oh he always had a job…but he was so devoted to the church… that he wanted his internship there… which didn’t work out (whomever put that idea in his head -I wanted to punch them!) … he had a decent job at a Juvenile delinquent center moving up (benefits package)… then decides to quit this to take this stupid job that doesn’t require a degree - because he felt he’d enjoy it (no health insurance)… I warned him he was making a bad choice… he knew how unhappy we were… he basically put his enjoyment above the practical aspects of Doing all you can to advance yourself when you are young… He stayed there a year… then quit due to the same reasons I told him (and others told him) not to take it… (DUH!)…
Now he feels he should have taken something else…
Myself & husband had a hard enough time… when he was looking for a Job we could raise our family on (never cared about being rich, new cars, etc but paying every bill -yes!)… … it took years to get that better job in our area… so to see 1st son get the degree then squander his opportunities…It was hard for me to keep my mouth shut… the job he just got now is pretty much where he left off at the other place, before he quit.
I personally think he should take something else…do our kids ever listen… at least 3rd son’s choices are something much more practical and employable… .
Regarding references upthread to the Roth IRA, while it is true that an amount in the Roth would not be considered an asset, withdrawals would be treated as income. So, if you had to repair a roof or buy a car, your income would go up by the amount you withdrew. Income is assessed more heavily than assets in the EFC calculation.
this is another whole question unrelated to a college forum… and I haven’t looked into it at all . I don’t even understand how our 401k works… but I was under the assumption it was rather expensive to take out a Roth IRA in comparison to others…is this true ?? what you put into it gets taxed upfront or something ??
I’m under the impression we are in too low of a tax bracket to get much gain from a Roth… there has to be pros & cons for every IRA and family situation …
You have that backwards. Because you are in a low bracket it is cheap to put money into a Roth IRA or Roth 401k.
Ignoring state income taxes, if you put $5000 into a Roth 401k or Roth IRA the foregone tax deduction is only $750. (15% federal tax marginal rate)
For someone in the top bracket, the foregone tax deduction of a $5000 Roth 401k or back door Roth IRA is $1,980. (39.6% marginal rate)
When you take retirement withdrawals (generally at least age 59.5) of Roth money you pay ZERO income taxes. For retirement withdrawals of non-Roth money you pay income tax at whatever your marginal rate is that year.
Re post #47, I did Geneva’s NPC and it asks for parents’ total income at end of calendar year and untaxed income (401k contributions) .