<p>I have been reading quite a bit about the financial aid process and especially the profile used by private institutions. When calculating assets one often figures out what the asset would be worth if it was liquidated for use to pay college tuition. When they ask about retirement assets should not the same rule apply?</p>
<p>All of my retirement assets have significant penalties as well as tax consequences if they are taken out early. Many of my accounts have significant penalties associated with them above and beyond how the IRS penalizes early withdrawals.</p>
<p>My question is if colleges expect you to use retirement assets should you not report what the cash value of those assets would be if you took them out to pay for college?</p>
<p>How do colleges look at retirement assets and do they really have any way of finding out what one has in private retirement accounts?</p>
<p>The profile states:</p>
<p>Report the total amount in tax-deferred retirements, pensions, annuities, and savings plans held by parent 1. You should include amounts in plans held by parent 1 in his/her IRA account(s), SRA Keogh account(s), 401(a) account(s), 401(k) account(s), 403(b) account(s), 408 account(s), 457 account(s), and 501(c) plans, etc., regardless of whether they were contributed by the parent or the parent's employer. For defined benefit pension plan values, use the most recent account statement received from the plan(s) that report the current net worth based on the employer and employee contributions.</p>
<p>This information is not used in the calculation the College Board sends to your school, although some schools may use it when determining the overall financial strength of your family.</p>
<p>You are supposed to report the value, not the value less penalties. You don’t get to reduce the amount of a home equity loan by the fees or interest …</p>
<p>You lost me on that response. I point out the profile says to calculate your home value use:</p>
<p>If your parents own a home, enter how much the home is worth. Use the price they could reasonably expect to receive for their home if it were sold today. Don’t use assessed, insured, or tax value. A “home” includes a house, mobile home, condominium, co-op, etc. </p>
<p>My understanding is that is the prices after commissions, taxes, etc. </p>
<p>Why are retirement assets different specially when accounts have such different penalties associated with cashing them out?</p>
<p>The thing is, you have to follow the directions. If the directions allow you to reduce the amount, you can. If they do not, you cannot. Much of it does not make sense. You just have to report it the way you are asked to report it.</p>
<p>Your should be receiving very soon a quarterly statement for your retirement accounts. The VALUE of those accounts is clearly listed on these statements. You should be able to access your account online for the same info for the current date. Your retirement account value is what is listed ON your retirement accounts statements…no reductions are permitted.</p>
<p>Excellent questions Nervdad. You’ve made a great case for reporting the value of retirement assets if liquidated for immediate use. Why would they ask for liquidated home value, but expect you to report retirement assets in a different context? The inclusion of retirement assets in the final equation is disheartening for those of us who have sacrificed a great deal in daily life to provide for ourselves in retirement.</p>
<p>I agree with Mom22039, it looks like they are looking for the market value of the home. It says the “price” which is different than the money actually received.</p>
<p>For homes, the market value is generally considered to be the amount you would receive if you needed to sell your home today. </p>
<p>For retirement accounts, the value is the value of the account on that day.</p>
<p>The point of all this is that you could borrow against your assets, not necessarily what you would receive if you sold them. It’s about your “worth.” Profile schools are interested in your financial position. How they actually use the info is a bit of a mystery, and it varies from school to school.</p>
<p>As this is for the CSS/Profile and not FAFSA (where the rules are straight forward), why don’t you call up a couple of universities that you are interested in and ask them how they look at it.</p>
<p>We just got our end of year retirement account statements today. The VALUE is clearly printed on the form. It is what we would get if we cashed in the policy today. It is a different number than what is guaranteed for retirement disbursement purposes. You should have one of these statements as well…it’s very clear.</p>
<p>While I agree that each college uses the information provided in the Profile differently, that is not the same as answering the Profile questions differently for different schools. Questions should be answered consistently, according to the Profile instructions, then each college adjusts, ignores, etc. them according to their own FA policies.</p>
<p>^^^ Yes, that is why I suggest calling around and ask schools how they do it. If three schools say “yes they consider retirements assets and this how we look at it”, that gives you an answer on how to complete it. If the schools you look at do not consider it, then as long as your are consistent, it may not matter.</p>
<p>I’m not sure what this means. The amount of your value of your retirement accounts and how you complete the CSS Profile has absolutely NOTHING to do with how the colleges use these numbers. The number should be the SAME regardless of how the colleges consider theses numbers.</p>
<p>Just look on your statement online and put the value down. It’s there and easily accessible.</p>
<p>Where folks run into problems is when they “interpret” the instructions. Just answer as asked. Do not try to figure out how it is used … that is irrelevant. Those here who are encouraging you to just give what you are asked to give are giving you great advice.</p>