<p>My sister-in-law told me her son (a high school junior) has some savings in a Roth IRA. How does that impact EFC on a FAFSA? Is it different if it is in the student's name versus parents?</p>
<p>Money already in retirement funds such as a Roth IRA don't count towards ASSETS in figuring the EFC for either parents or children. However, any money being put into a retirement fund will count towards INCOME for that year, for either parents or children.</p>
<p>If the IRA is not deductible, it is already counted in income. Therefore, there is nothing to "add back." </p>
<p>Also, only the wage earner can contribute to his/her own IRA; therefore, it would not be possible to put a child's IRA into the parents' name.</p>
<p>another, I agree that an IRA has to be in the earner's name, but it's not true that "only the wage earner can contribute to his/her own IRA". It is ok for a parent to contribute to a Roth in the child's name up to the amount that the child has earned (and below the maximum contribution).</p>