tax deferred annuity

Paying for College
1

<p>My son has about 25000 in a savings account. If he decides to invest it into a Tax deferred annuity for his retirement; will it affect either the FAFSA or CSS profile EFC?</p>

<p>From what I've read, this is treated as a retirement asset. I'm assuming it would be 'sheltered' even if it is in his name - right? From what I understand, he could choose to cash it out after school to pay off loans; and he'd pay income tax on the gain plus a 10% penalty on the gain. Sound right?</p>

<p>also - anyone have any TDAs they recommend?</p>

2

<p>Contributions to tax deferred accounts are limited. I’m not sure your son can put all $25,000 into a tax deferred account in one tax year.</p>

<p>If this is in regular savings…you have already PAID taxes on this money, presumably.</p>