<p>You bet. That 529 $$ wasn't ours to begin with, so there's no problem. The post I referenced was one that didn't distinguish among different sources of money from others. That's why I thought it might be helpful to share what I found after it jolted me a bit.</p>
<p>There are a number of ways to reduce your assets, if you'd like. Some have been mentioned (e.g. buy a snazzy car). Here's one I didn't see above-transform your regulary IRAs into Roth IRAs and pay the taxes with savings. If you do this, do it in the sophmore year rather than junior year. The potential problem, of course, is that once you've done it, those liquid assets are gone, so that if the kid gets into "super expensive U" and doesn't get a free ride, you may wish you still had the assets. </p>
<p>Someone mentioned buying a bigger house; you could also prepay mortgages. However, home equity is included on the CSS Profile. All the schools my kid applied to required the Profile.</p>
<p>As was mentioned above, they want 5.6% of parental assets; I don't think it's worth playing the "move the assets" game for that.</p>
<p>go ahead! I think it safe to say the consultant will save you at most a tidy $800. Oh, wait a minute . . . oh, I see, now I get it . . . . ALL THAT AND MY VIRTUE, TOO!</p>
<p>I know that some folks have been sorta tongue in cheek about buying new cars with the loose change . . .be aware that some schools using Profile actually ask about one's cars . . . I got to tell them all about the '87 S10 and the '94 Cavalier.</p>
<p>I would suppose that if you had three of more years of advance planning for college, $800 maybe a good investment. If you have 0 years before college expenditures-its just too late. </p>
<p>Look at the problem as a "retirement" problem. If you do your planning and moving the money around early enough, like about 30 years ago, you got it made. However, if you start thinking about it when you hit 60 or 65, then you got some problems that can not be solved by any magician.</p>
<p>As I have been mulling over our personal taxes for 2004 and cultivating the plot for 2005:</p>
<p>The FAFSA, College Profile, are very similiar to 1040 and schedules. Which leads me to the thought- We all know how to minimize taxes, don't we? And let "only the poor pay taxes." </p>
<p>There seems to be more loopholes this year than last year.</p>
<p>"Cathy" is always fun this time of year.</p>
<p>Momof3-- Does that beat my '92 Corolla and '93 Quest (minivan)?</p>
<p>Profile is worse than the 1040. You get to add in a lot of things that are tax exempt (contribs to 401K, for example) and include all your kids accounts, not just the one in college. The also want to know the equity in your house.</p>
<p>They ask what you owe on your house and what your house is "worth". I'll wager that in some parts of the country you could hide a few dollars there.</p>
<p>One other aspect to "hiding" money - colleges sometimes have their own aid forms or add custom questions to the profile. So, even if buying a $70K Lexus for cash works fine with the FAFSA, you may end up reporting that asset to the college. Elite colleges that use the Profile often use some discretion in awards rather than using the FAFSA EFC, so if it looks like you've done some major asset juggling it could come back to bite.</p>
<p>Still, the common-sense advice above applies - reduce cash by paying down loans or making planned major purchases early. Don't store money in the student's name. Don't get major gifts from grandparents and others before financial aid calculations.</p>
<p>Income is not usually something one can reduce without pain, but some income can be avoided or postponed (not selling stock to produce a capital gain, delaying bonuses, etc.) If a parent is planning to quit work to attend school, doing that simultaneously with a child is a great idea - less income, and the EFC is split.</p>
<p>thank you everyone for your helpful advice</p>
<p>f a parent is planning to quit work to attend school, doing that simultaneously with a child is a great idea - less income, and the EFC is split.</p>
<p>not really
colleges often do not consider haivng a parent in college as the same as a sibling in college.
While the parents EFC will reflect that they are paying tuition for a dependent- the childs EFC will not.</p>
<p>Again I was pretty clear on this. (Or so I thought?) But I just went to the college board calculator and fiddled with some different inputs. If I wereto NOT put the money in the retirement accounts and thus increasing the income earned and eliminating the unearned income then the EFC went down by about 10,000 dollars! If that's the case would it not be better (except for the tax benefit) to not contribute pretax dollars but contribute the same amount to the ROTH IRA? I don't intend to borrow any money from these accounts. Both schools are state schools. our experience is they have gone by the FAFSA numbers. HELP!</p>
<p>I believe I just answered part of my question. The annual maximum contribution to the IRA is much less than the allowance for the 403b and 401k plans.</p>
<p>Where is this EFC calculator???</p>
<p>I used the one on collegeboard.com</p>
<p>What about annuites?</p>
<p>We attended a college planning seminar and went for the consult today. We have low income ($45K) and high non-ira assets $300k and $200K equity.</p>
<p>The counseler talked about "repositioning" assests legally, morally and ethically but wouldn't say where until we plop down the $2500 sign up fee. I think I've deduced that it's annuities that he, BTW, offers as he is also a financial consult/planner.</p>
<p>What do you think? rip off, or?</p>
<p>here is the site:</p>
<p>www.collegeplanningabc.com</a> - Home</p>
<p>thx</p>
<p>bob</p>
<p>Simpliest way is to gift all valuable assets to reduce the overall contribution. Grandparents, siblings etc. There's nothing you can do about income if it is reported on your parents tax returns.</p>
<p>FAFSA doesn't "see" money in retirement accounts, home equity, or the cash value of paid up life insurance. That would include annuities set up for retirement, IRAs, 401(k)s etc. The CSS Profile does look at home equity, and may look at some kinds of retirement funds (I don't know enough about it to give details, but someone here surely does).</p>
<p>By the way, I learned this about eight years ago when I picked up a copy of "Personal Finance for Dummies" at the bargain books table at the library book sale. So it's not exactly news. Happydad and I don't own a house, and don't have buckets of money hanging around, but you can bet that every single cent that can be saved in a 401(k) or an IRA is going there.</p>
<p>Do yourself a favor, and run some FAFSA calculators (you can start with the one at FinAid</a>! Financial Aid, College Scholarships and Student Loans). This will give you a better sense of just how much the colleges/universities will expect you to be able to spend for your kid(s) education(s) each year. You also need to put serious thought to just how happy you would feel if the majority of your savings were locked away in annuities (or paid up life insurance policies) where you couldn't get to them easily in an emergency. These kinds of instruments may not be good options for your family.</p>
<p>If you think the annuity route is a good way to go, take some time to research the specific offerings of a number of reputable companies before you tie your money up forever. The guy you spoke with today may be good, and his product line may be good, but he also may be a blood-sucker. Before you work with him, find out if he is a fee-for-service planner who will bill you a fixed amount (that is he's really working for you), or if he gets commissions from the products that he sells (that is, he's really working for "them").</p>
<p>You are in a challenging situation. I wish you all the very best.</p>