Q & A:
Q: Can I tap into my retirement savings to pay for my child’s college education?
A: Dear Pondering:
If your kids will need financial assistance, beyond student loans, to pay for their college education, it’s vital that the way in which you choose to save will not negatively impact their qualification for such assistance. To this end, while you can use your retirement funds to pay for college expenses, this can affect your child’s eligibility for various need-based financial aid programs.
Retirement funds withdrawn to pay college expenses are reported on the Free Application for Federal Student Aid (FAFSA) as additional income. Consequently, when using retirement funds, the expected family contribution used from FAFSA will be higher, which will therefore reduce your child’s chances of qualifying for financial assistance.
Consult with us as your Personal Family Lawyer if you choose to tap into your retirement savings to fund college expenses, so we can ensure it’s done right and will have the maximum benefit for everyone involved.