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Author Topic: Roth IRA and financial aid  (Read 875 times)

incognito

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Roth IRA and financial aid
« on: August 21, 2005, 12:37:40 PM »
I've been working for five years and have a little money in a Roth IRA.  I know that the FAFSA does not consider money held in those when calculating need, but do individual schools consider it when offering supplementary aid?  I really don't want to withdraw it and possibly pay a penalty.  Anyone know the story?
Duke 2009

spanky jones

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Re: Roth IRA and financial aid
« Reply #1 on: August 21, 2005, 04:26:02 PM »
I've been working for five years and have a little money in a Roth IRA.  I know that the FAFSA does not consider money held in those when calculating need, but do individual schools consider it when offering supplementary aid?  I really don't want to withdraw it and possibly pay a penalty.  Anyone know the story?

They took my Roth money into account for my expected financial contribution.  I have also been putting money in it for about five years. 

You are allowed to withdraw up to $10,000 from a Roth IRA for educational expenditures (in addition to the original money you put in) without penalty.  However, I would not suggest doing that, this is probably the only vehicle you have for tax free growth over a lifetime.  I know I am not touching mine (and will continue to add to it through the three years of law school).

Law school is so expensive that I don't think your Roth will have an effect in how much loan money you can get and the types of loans.  I still qualified for the maximum unsubsidized and subsidized stafford loans, and the amount of investments you have doesn't affect how much you get in private loans since they are private.