<p>Agree with bluebayou & mom2. Which brings up a point: Beware of structuring your entire financial life around college. Sometimes the attempt to minimize college expenses can lead you to do things that are not in the overall best interest of your financial situation. Keep the big picture in mind.</p>
<p>Yes, LasMa! The child could join the Merchant Marinesnext June and skip college entirely and the family’s funds would be tied up in the shelter. Ouch.</p>
<p>If you are applying to FAFSA schools, you can pay off or down your mortgage to reduce your assets to the formula protected amount and then access them via a HELOC if you want to. No, you are not earning interest, but you are also not paying interest on that amount of mortgage loan (if you still have a mortgage)</p>
<p>If you are only talking about $100k and you are a couple you probably have arounf $50k in asset protection. Go to the actual formula [Federal</a> Student Aid - IFAP: iLibrary - EFC Formula Guide](<a href=“http://ifap.ed.gov/ifap/byAwardYear.jsp?type=efcformulaguide]Federal”>http://ifap.ed.gov/ifap/byAwardYear.jsp?type=efcformulaguide) and see how it would help you to shelter assets.</p>
<p>If your income is too igh there is not really a point in sheltering any assets as you may not get any grant aid and would merely have tied your own hands and limited your ability to self fund the costs.</p>
<p>Re: Buy term and invest the difference, i have worked in a variety if financial & estate planning offices and insurance offices over the years. Most people do not invest the difference, instead they buy more term coverage. Even if you do have the self-discipline to invest the difference, you have no guarantee to make a great return, it all depends on the luck of your timing and your tenacity in continuing to invest each month.</p>
<p>I have not seen many situations where a MEC is advisable.</p>
<p>Run the formula with and without assets and see if it makes much difference, if you are not Pell or state grant eligible, there is not much more need based aid at most FAFSA schools.</p>
<p>Cash value life insurance and annuities could be an effective shelter if you are low income, high asset and they make sense not considering college. Then you could time the investments for the best college financial aid results, but in general, don’t use them if they don’t make sense in the bigger picture.</p>
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<p>Wow. If it sounds too good to be true, it generally is. Did the salesman look a lot like Bernie Madoff?</p>
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<p>These products are not unusual at all in the annuity and life insurance market. It’s a tradeoff. The insurance company takes on more of the risk and ensures no loss contracts; but in an up market, you’ll get lower returns.</p>
<p>You quoted from CSS profile:</p>
<ul>
<li>“Total current value of tax-deferred retirement, pension, annuity, and savings plans. Include IRA, SRA Keogh, SEP, 401(k), 403(b), 408, 457, 501(c) plans, etc.”</li>
<li>“The amount of deductible IRA and/or SEP, SIMPLE, or Keough payments” you made or will make.</li>
<li>“The amount of payments to tax-deferred pension and savings plans” you made or will make.</li>
</ul>
<p>If I (parent) buy life insurance and tax-deferred annuity (not retirement/pension category), where should I fill in CSS profile?</p>
<p>abe2000: Question PA-120 asks “What is the current market value of your parents’ investments?” (excluding home, business, farm, or other real estate)</p>
<p>The annuity would be reported here, as would a whole life insurance policy. Term life is not reported at all on PROFILE.</p>
<p>Lasma,</p>
<p>Thanks for your answer. If we put life insurance and annuity here, they count for asset (probably not liquid assent). IRA has a limit amount. if we have extra money and buy tax-deferred annuity (not ira), where should we put? I know in css file, there is item called “IRA, annuity, pension…” if we buy non-ira annuity, can we put in this item?</p>
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<p>This is not accurate.</p>
<p>Below is from the Profile FAQs at Collegeboard.com</p>
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<p>Sorry I didn’t explain my question clearly. I am a parent. Besides retirement ira, I also have tax-deferred annuity (non-ira account) and simple premium life insurance (beneficiary is my wife). I am told these 2 items are not counted for my child’s college financial aid. In which category should I fill in CSS profile?</p>
<p>As scottaa already posted, you don’t report life insurance if there’s no distribution. It’s not considered as asset for CSS profile purpose, that’s why these 2 items are not counted for your child’s college financial aid.</p>
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<p>For FAFSA, the IRA, nor the annuity, nor the cash value in life insurance are counted towards your EFC.</p>
<p>For the Profile, the IRA and annuity are counted, but it is rare that the life insurance is counted (it can be a supplementary question, but I can’t remember the last time I saw a school ask for it). Generally, life insurance is considered the asset of last resort and therefore not bothered with.</p>
<p>What do you mean “In which category should I fill in CSS profile?” Do you mean how do you know if you have to file a Profile?</p>
<p>I mean in css profile, in which items should I fill annuity (not distributed yet) and life insurance (not distributed yet)?</p>
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<p>On the Profile – </p>
<p>For the annuity take a look at PA-120WG</p>
<p>The life insurance is not reported unless specifically asked for in the “Supplemental Questions” section.</p>
<p>I got it. Thank all of you for the help.</p>
<p>is there any difference between a current employers 401k and a 401k left under a previous employers plan as far as the css profile?</p>
<p>in CSS profile,
item PD-175, “parent’s tax-deferred retirement, pension, annuity, and savings plans”</p>
<p>item PA-120 “total current market value of parten’s investments”
worksheet: item PA-120WG, “non-qualified (non-retirement) annuities” </p>
<p>If non-IRA tax-deferred annuity goes to item PA-120WG, it seems college financial aid counts this kind of annuity. But from this web blog, people agree college aid won’t count annuity. I am confused.</p>
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<p>No, both are 401(k)s. The previous employer’s plan should probably be rolled over into a rollover IRA, but even so it would be treated the same.</p>
<p>so i guess you would sum the current and old 401k for line pd175a? would an annuity(ira type) get lumped in there also?</p>
<p>in css form:</p>
<p>item PA-120 “total current market value of parten’s investments”
worksheet: item PA-120WG, “non-qualified (non-retirement) annuities” </p>
<p>is non-qualified taxed deferred annuity considered asset?</p>