<p>I don’t *think <a href=“99%%20sure%20-%20someone%20correct%20me%20if%20I%20am%20wrong”>/I</a> she can deposit $70,000 in an IRA in one year. There are limits to how much it is possible to put in an IRA in a tax year. For 2009 I think the limits are $5000 for age 49 and below and $6000 for 50 and over. The limits may be different for 401ks but are related to income - the lesser of the max % a company allows or some % of income set by the govt. I don’t think anyone can contribute $70k to a retirement account in one calender year. [If she is talking about rolling funds from one traditional IRA into a new one then that should have no affect on the AGI (as long as she follows the rollover rules). If she is converting from a traditional into a roth then there will be tax implications and it might cause problems with the EFC.]</p>
<p>A contribution to an IRA does not increase your EFC. It is just not allowed to decrease your EFC. On a tax return contributions to regular IRAs (not Roth IRAs as they are with after tax money) are deducted from income before the AGI, reducing the AGI on the tax return. The income figure reported on FAFSA is the AGI, but the IRA contribution deduction is added back to the AGI in the EFC formula as it is considered money that is available for college.</p>