Are Roth IRA funds counted as retirement assets on FAFSA applications?

Good news! Retirement accounts, including Roth IRAs, are NOT counted as assets on the FAFSA. This is one of the most common misconceptions. The FAFSA specifically excludes retirement plans (401k, Roth IRAs, traditional IRAs, pension funds, etc.) from the asset calculation. However, make sure your parents don't report any contributions they made to the Roth IRA during the tax year as untaxed income - that's a separate question the FAFSA asks about. But the actual value of the Roth IRA itself is not reported anywhere on the FAFSA.

nope, roth iras dont count on fafsa. your school advisor shoulda known that lol. my parents have like 3 diff retirement accounts and we didnt put any of em on my fafsa

I just went through this EXACT same situation with my parents! The FAFSA system is so confusing and there's hardly any clear explanations anywhere. We spent 3 hours on hold with studentaid.gov trying to get a straight answer about retirement accounts. When we finally reached someone, they told us NOT to include the Roth IRA as an asset, but they said something weird about voluntary contributions that made us even more confused. The whole system is designed to trick families into reporting things wrong so they can deny aid!! It's so frustrating I wanted to scream.

It depends on if they're taking distributions from the Roth IRA. My brother put our mom's Roth IRA on the FAFSA last year and got way less financial aid than expected because they counted it!! The financial aid officer told him they were supposed to report it. So confusing!!!! 🤯

I work in a financial aid office, and I can confirm that retirement accounts like Roth IRAs are NOT counted as assets on the FAFSA. However, there's an important distinction regarding contributions: 1. The total value of the Roth IRA: NOT reported anywhere on FAFSA 2. Voluntary contributions to retirement accounts made during the tax year: These ARE reported as untaxed income in the Financial Information section So if your parents contributed to their Roth IRA during the base tax year, those contributions should be reported as untaxed income. This is probably why your financial aid advisor gave a vague answer - it's not a simple yes/no question. The reason for this is that the FAFSA wants to capture income that was earned but sheltered from taxation through retirement contributions. It's not counting the retirement asset itself, but rather the portion of current income directed to retirement savings.

The treatment of Roth IRA contributions on FAFSA is different from traditional IRA contributions, which is causing some confusion in the other responses. Here's the technical breakdown: - For Traditional IRAs: Contributions ARE reported as untaxed income because they're made with pre-tax dollars - For Roth IRAs: Contributions are NOT reported as untaxed income because they're already taxed - For both: The actual value of the retirement account is NOT reported as an asset This is specifically addressed in the Federal Student Aid Handbook, which financial aid administrators use as guidance. Since Roth IRA contributions have already been taxed (they're made with after-tax dollars), they don't need to be added back as untaxed income on the FAFSA. The FAFSA is looking to capture a complete picture of income, whether taxed or untaxed. Since Roth contributions were already included in your parents' AGI and taxed, they don't get reported again.

Just to confirm what others have said with the official source: According to the Federal Student Aid Handbook (2023-2024 edition, AVG-16), it states: "Qualified education benefits, retirement plans, and ABLE accounts. These include 529 plans, Coverdell savings accounts, the value of qualified education benefits or education savings accounts (e.g., 529 college savings plans, Coverdell savings accounts, refunds from qualified tuition programs...), and retirement plans such as 401(k) plans, pension funds, annuities, non-education IRAs, Keogh plans, etc." So your father's Roth IRA is definitely excluded from asset reporting. I encourage you to check the latest SAI formula guide on studentaid.gov for the most current information for 2025-2026.

Wait I'm confused now because of all these different answers. So do we report the Roth or not?? And what about contributions?? This is why the FAFSA is IMPOSSIBLE to fill out correctly! They deliberately make it confusing so they can deny aid to as many students as possible. I've been trying to figure out the right answer for weeks and keep getting different information everywhere I look. How are regular families supposed to understand all these financial terms and exceptions??!!

Thanks everyone for the responses! This has been super helpful. After reading all your comments, I called Federal Student Aid to confirm (took me hours to get through) and they verified that: 1. We do NOT need to report Dad's Roth IRA as an asset 2. We do NOT need to report his Roth IRA contributions as untaxed income Apparently, the financial aid advisor at my school was confused about the difference between traditional and Roth IRA contributions. I really appreciate everyone taking the time to explain this - the FAFSA instructions really should be clearer! Submitting my application tomorrow with confidence.

Congratulations on getting it figured out, Connor! This thread is going to be so helpful for other families dealing with the same confusion. I went through this exact same stress last year with my parents' retirement accounts. The FAFSA really should have clearer language distinguishing between different types of retirement contributions - it would save so many families from this headache. Thanks to everyone who contributed accurate information here, especially the financial aid professionals who clarified the technical details!

This is such a valuable thread! I'm a junior starting to think about college applications and financial aid, and I had no idea about the distinction between traditional and Roth IRA contributions on the FAFSA. My parents have been contributing to a Roth IRA for years and I was worried it would hurt my chances at financial aid. Reading through all these responses really clarified things - it's reassuring to know that retirement savings won't be counted against us. Thanks Connor for asking the question and everyone for the detailed explanations. Definitely bookmarking this for when I fill out my own FAFSA next year!

This thread has been incredibly helpful! I'm a parent of a high school senior and we were having the exact same concerns about our Roth IRA when starting the FAFSA process. The distinction between traditional and Roth IRA contributions is something I never would have understood without reading these explanations. It's frustrating that the FAFSA instructions don't make this clearer - so many families probably get confused about this. I'm sharing this thread with our parent group chat because I know several other families are dealing with the same questions right now. Thank you to everyone who provided such detailed and accurate information, especially the financial aid professionals who clarified the technical aspects!

This is such a valuable discussion thread! As a newcomer to the FAFSA process, I had no idea there was even a difference between how traditional and Roth IRA contributions are treated. Reading through everyone's experiences really highlights how confusing the financial aid system can be for families. It's concerning that even financial aid advisors at schools sometimes give incorrect information about retirement accounts. I'm grateful for the community members who took the time to provide detailed explanations and cite official sources - it really shows the importance of getting multiple perspectives and verifying information directly with Federal Student Aid when in doubt. This thread will definitely be a resource I reference when helping my younger siblings with their FAFSA applications in the coming years!

This thread has been absolutely incredible to read through as someone just starting to navigate the college financial aid process! I had no idea about the complexity around retirement accounts and FAFSA reporting. The distinction between traditional and Roth IRA contributions is something I never would have thought to research on my own. What really stands out to me is how even school financial aid advisors can sometimes provide unclear or incorrect information - it really emphasizes the importance of doing your own research and getting confirmation directly from Federal Student Aid when you're unsure. Connor, I'm so glad you persisted in getting the right answer and shared your experience here. The stress you described about potentially reporting something wrong and losing financial aid eligibility is something I think many families can relate to. Thank you to all the financial aid professionals and experienced community members who provided such detailed, accurate explanations with official sources. This is exactly the kind of supportive, informative discussion that makes online communities so valuable!

This thread has been such a goldmine of information! As someone completely new to the FAFSA process and this community, I can't believe how confusing retirement account reporting can be. Reading through Connor's journey from stress and confusion to finally getting the right answer really resonates with me - I can already feel that same anxiety about making mistakes that could impact financial aid eligibility. What I found most valuable was seeing how the community came together with different perspectives, and how important it was to distinguish between the various types of retirement accounts and contributions. The fact that even school financial aid advisors sometimes give vague or incorrect information is both concerning and helpful to know upfront. I'm definitely going to reference this discussion when I start my own FAFSA application, and I really appreciate everyone who took the time to provide detailed explanations with official sources. Thank you Connor for asking the question that so many families probably have, and thanks to all the experienced members who helped clarify these complex rules!

What an incredibly thorough and helpful thread! As someone just joining this community and about to start the FAFSA process for the first time, I'm blown away by how complex something as seemingly straightforward as "do we report retirement accounts" can actually be. Connor, your experience really highlights how stressful this process can be when you're worried about making a mistake that could cost thousands in financial aid. The distinction between traditional and Roth IRA contributions that several members explained here is something I never would have known to look for. It's honestly concerning that even school financial aid advisors can give unclear guidance on this - it really drives home the importance of getting information from multiple sources and ultimately confirming with Federal Student Aid directly when there's any doubt. I'm especially grateful to the financial aid professionals like Leo and Molly who took the time to provide detailed explanations with official sources. Having that level of expertise shared so generously in the community makes navigating this overwhelming process feel much more manageable. This entire discussion is definitely going in my FAFSA prep folder for reference!

This thread has been absolutely invaluable! As someone completely new to both this community and the FAFSA process, I can't express how helpful it's been to see Connor's journey from confusion and stress to getting the right answers. The anxiety about potentially making a mistake that could impact financial aid eligibility is so relatable - it's exactly what I'm feeling as I prepare to start my own application. What really struck me is how even professionals can sometimes give conflicting information about retirement accounts. The distinction between traditional and Roth IRA contributions that multiple members explained here is crucial knowledge that I never would have discovered on my own. It's honestly eye-opening to see how many nuances exist in what seems like it should be a straightforward question. I'm particularly grateful to the financial aid professionals who cited official sources and took the time to clarify the technical details. Having that level of expertise shared so generously makes this overwhelming process feel much more manageable for newcomers like me. This entire discussion is definitely going into my FAFSA reference materials - thank you to everyone who contributed to making this such a comprehensive resource!

This has been such an educational thread to read through! As a complete newcomer to both this community and the FAFSA process, I'm amazed at how much complexity exists around something that seems like it should be straightforward. Connor, thank you for sharing your experience and persistence in getting the right answer - your journey from stress to clarity is exactly what so many families go through with FAFSA questions. The distinction between traditional and Roth IRA contributions that the financial aid professionals explained here is incredibly valuable information that I never would have thought to research on my own. It's both reassuring and concerning to see how even school advisors can sometimes provide unclear guidance on these technical details. I'm particularly grateful to members like Leo, Molly, and Skylar who took the time to provide detailed explanations with official sources. Having that level of expertise shared so openly makes this overwhelming process feel much more approachable for those of us just starting out. This entire discussion is definitely going into my FAFSA preparation materials as a key reference. Thanks to everyone who contributed to creating such a comprehensive and supportive resource!

This thread has been absolutely fantastic for someone like me who's just starting to navigate the FAFSA maze! Connor, I really appreciate you sharing your experience and sticking with it until you got the definitive answer. The stress you described about potentially making a costly mistake really hits home - I'm feeling that same anxiety as I prepare my own application. What's been most eye-opening is seeing how even financial aid advisors at schools can give vague or conflicting information about retirement accounts. The detailed explanations from the financial aid professionals here about the distinction between traditional and Roth IRA contributions have been invaluable - this is exactly the kind of nuanced information that the official FAFSA instructions should make clearer. I'm definitely bookmarking this entire discussion as a key reference for my own FAFSA prep. It's reassuring to know there's such a knowledgeable and supportive community here to help newcomers understand these complex rules. Thanks to everyone who contributed their expertise to make this such a comprehensive resource!

This has been such an incredibly helpful thread to read as someone completely new to the FAFSA process! Connor, thank you for persisting through all the confusion and sharing your experience - the anxiety you described about potentially making a mistake that could affect your financial aid is exactly what I'm feeling as I start preparing my own application. What really stands out to me is how this one question about Roth IRAs revealed so many layers of complexity that aren't immediately obvious from the FAFSA instructions. The distinction between traditional and Roth IRA contributions that the financial aid professionals explained here is crucial information that I never would have known to look for on my own. It's both reassuring and concerning to see how even school financial aid advisors can sometimes provide unclear guidance on these technical details. This really drives home the importance of getting information from multiple sources and ultimately confirming directly with Federal Student Aid when there's any uncertainty. I'm especially grateful to members like Leo, Molly, and Skylar who took the time to provide detailed explanations with official sources. Having that level of expertise shared so generously makes this overwhelming process feel much more manageable for newcomers like me. This entire discussion is definitely going into my FAFSA prep materials as an essential reference!

This thread has been absolutely invaluable for someone just entering the world of college financial aid! As a newcomer to this community, I'm amazed by how one straightforward-seeming question about Roth IRAs turned into such a comprehensive educational discussion. Connor, your persistence in getting the right answer despite conflicting information is really admirable - and the stress you described about potentially jeopardizing your financial aid over a reporting mistake is something I think every family going through this process can relate to. What's been most enlightening is seeing how even professionals can sometimes provide unclear guidance on these technical details. The explanations from the financial aid experts here about the crucial distinction between traditional and Roth IRA contributions have been incredibly helpful - this is exactly the kind of nuanced information that should be more clearly explained in the official FAFSA materials. I'm definitely saving this entire discussion as a key reference for when I tackle my own FAFSA application. It's reassuring to know there's such a knowledgeable and supportive community here willing to help newcomers navigate these complex financial aid rules. Thank you to everyone who contributed their expertise to create such a thorough and helpful resource!