<p>Money contributed to a Roth does not reduce your AGI. It is not added to income by the FAFSA formula as it is not deducted from your income in the first place. It has already been reported on FAFSA as income as part of your AGI.</p>
<p>Money contributed to a non Roth IRA or 401-k is a before AGI deduction on your tax return and therefore does reduce your income that is reported on FAFSA. This type of contribution is added back to your AGI in the FAFSA formula.</p>