CSS Profile Tip #8: Reporting Retirement Accounts

[@natejanahoward626]

Do you have to add the current value of a govt pension plan under parent details?

[@CollegeCoach]

Sorry for the late reply, but yes, you do.

[@shineniable515]

what should i do if my parent doesn't have a retirement plan?

[@TheRedTrucks]

Thank You very much!

[@carolyngorman6379]

I am a retired parent and draw on my 401K (TSP - I’m retired federal govt) and I receive a monthly pension. It seems the CSS wants the total current balance in my 401k (TSP) and the calculated “net worth” of my annuity (pension). I looked up how to calculate the net worth of my pension and a $70k per year pension calculates out around 2.5 million net worth (over lifetime disbursement). So I guess I add that huge expected lifetime pension payout to total 401K balance? The question reads: “Current value of tax-deferred and after-tax retirement, pension, annuity, and savings plans such as an IRA, Roth IRA, Keogh, SEP, 401(a), 401(k), 403(b), 408, 457, 501(c).” And explains further: “Retired - Report the total amount in this parent's tax-deferred retirement accounts, regardless of whether the contributions were from this parent or made by their employer. For defined benefit plans, report the net worth from the most recent account statement.” Am I understanding right that I have to calculate rest of life net worth of my pension and add that to total value of my 401K (TSP)?

[@CollegeCoach]

Yes, that’s correct. While you need to report that pension value, we wouldn’t worry too much about it. The retirement account values do not, except in very rare circumstances, feed into the actual financial aid calculations.

[@asudekok1171]

Hello, I was wondering if savings and investments were considered as annual income. I’d be very glad if you could inform me a little.

[@CollegeCoach]

The financial aid process considers both your income and your assets. Most types of savings and investments are included as assets.

[@jayadams9375]

I am the beneficiary of an irrevocable trust, do I need to report that under assets? Also, my kid is a beneficiary of my own living trust, do I need to report that?

[@CollegeCoach]

The irrevocable trust you are a beneficiary of should be reported as a parent asset and the living trust that your child is a beneficiary of should be reported as a student asset.

[@velindarub]

Is it possible to be audited for Retirement account balances?

[@CollegeCoach]

The financial aid office can ask you to document anything they’d like, but it’s unlikely they’d verify retirement accounts since they don’t feed into the financial aid calculations at all, except in very rare circumstances.

[@robinbremby513]

I am a teacher and wondered if my MIP retirement needs to be reported? It isn't truly a savings so I cannot actually give an amount.

[@CollegeCoach]

They do ask about state-sponsored retirement plans on the Profile. For defined benefit plans, they instruct you to "use the most recent account statement that shows the current net worth." If anything requires further explanation, there is an "additional information" box on the Profile where you can explain things. I wouldn't worry too much about it as the retirement account balances don't actually feed into the financial aid calculations in the vast majority of cases anyway.

[@anigreen6939]

hello, on the retirement plan section, what if parents dont know the exact amount, and having hard time retrieving it, can they estimate it? thanks

[@CollegeCoach]

Yes, that should be fine. The retirement plan numbers don’t actually feed into the financial aid calculations-they’re just there to paint a more complete picture of the family’s financial circumstances.

[@saron03]

So should I write the exact amount in my parents retirement plan account?

[@CollegeCoach]

When it specifically asks for the retirement plan balance, yes.

[@saron03]

@@CollegeCoach okay, thanks!!