Does a Roth IRA count as retirement funds on FAFSA parent income section?

Good news! Roth IRAs are considered retirement accounts and are NOT reported as assets on the FAFSA. The 2024 FAFSA simplification specifically excludes all qualified retirement plans including 401(k)s, 403(b)s, pension funds, and both traditional and Roth IRAs from the asset calculations. So your $68k Roth IRA should not be included when reporting your assets. However, if you contributed to the Roth IRA during the tax year being reported, those contributions will still appear as part of your AGI on your tax return, which is used for income reporting.

roths are retirement so ur good dont count it. i think only thing that counts is like cash, checking, savings, and investment stuff thats not retirement. my counsler told me retirement funds are protected on fafsa

I JUST went through this nightmare with my son's application!!! The FAFSA system is DELIBERATELY confusing and the documentation is TERRIBLE. Our financial advisor told us Roth IRAs don't count but then the FSA helpline gave me completely different information when I called (after waiting 2 HOURS). They initially told me I had to report it, then changed their answer when I pushed back. The entire system is designed to frustrate parents and students!!!

One thing no one has mentioned yet - if you've recently converted any traditional IRA funds to Roth IRA funds, that conversion amount would show up as income on your tax return for that year, which could affect your FAFSA. So while the Roth IRA itself isn't counted as an asset, any conversions might impact your income figures for FAFSA purposes. Just something to keep in mind!

Just to provide a bit more clarity on retirement accounts and FAFSA: 1. All qualified retirement plans (401k, 403b, IRAs including Roth) are excluded from asset reporting 2. The value of your retirement account has zero impact on your SAI calculation 3. However, contributions made during the base tax year DO appear as part of your income 4. Roth IRA conversions (as someone mentioned) DO count as income in the year they occur One thing to watch for in the future: if you take distributions from your Roth IRA, those might affect future FAFSA applications depending on whether they're qualified distributions and how they're reported on your tax return.

Thank you all for the helpful responses! So it sounds like: 1. Don't include our Roth IRA as an asset (that's a relief) 2. But be aware that our Roth conversion from last year will show up as income on our tax return 3. And we should be careful about any distributions This helps a lot. I'm going to make sure I leave the Roth IRA off the assets section entirely. Hopefully her SAI won't be too high with the conversion income. This system is so complicated!

my cousin filled out fafsa wrong and put his parents retirement on it and got wayyy less financial aid than he shoulda got so definitely dont put it on there!!!!

I still think it's RIDICULOUS that they make this so confusing!!! Why can't they just have CLEAR instructions on the form itself?? And if you try calling the helpline, good luck getting consistent information. This is why so many families miss out on aid they deserve!!!

As someone who just went through this process with my own kid, I can confirm what others have said - Roth IRAs are definitely NOT counted as assets on the FAFSA. The 2024-25 FAFSA treats all qualified retirement accounts the same way, so you're good there. But I wanted to add one more thing that might help: if you're unsure about ANY part of your FAFSA, most colleges have financial aid offices that will review your application before you submit it. I called my daughter's school and they walked me through the asset reporting section over the phone. Way better than trying to decipher the government instructions! Also, keep records of what you reported in case you need to reference it later.

I'm a newcomer here but wanted to share my recent experience - I made the mistake of initially including our Roth IRA balance when I first started filling out my son's FAFSA last month. Thankfully I caught it before submitting after reading through the updated guidelines more carefully. The key thing that helped me was finding the actual Federal Student Aid handbook online (not just the basic instructions) which explicitly lists Roth IRAs under excluded retirement assets. It's on page 4-18 if anyone wants to double-check. Also, I learned that if you do accidentally submit with retirement funds included, you can make corrections through the online portal - just make sure to document why you're making the change. The whole process is definitely more confusing than it needs to be, but this community has been super helpful for navigating it!

As a new member here, I wanted to thank everyone for this incredibly helpful thread! I'm in the exact same situation with my daughter's FAFSA - we have about $45K in a Roth IRA and I was completely confused about whether to include it. The consensus here that Roth IRAs are excluded as retirement assets is such a relief. I'm especially grateful for the tip about the Federal Student Aid handbook on page 4-18 - that's going to be my go-to reference. It's frustrating how unclear the basic FAFSA instructions are, but this community discussion has given me way more confidence in filling out our application correctly. Thanks for helping confused parents like me navigate this process!

As a newcomer to this community, I just wanted to say how incredibly helpful this entire discussion has been! I've been stressing about this exact Roth IRA question for weeks while trying to complete my son's FAFSA. The clear consensus here that Roth IRAs are excluded as retirement assets is such a huge relief. I especially appreciate everyone mentioning the Federal Student Aid handbook with the specific page reference (4-18) - that's exactly the kind of authoritative source I was looking for. It's also reassuring to know that corrections can be made if needed and that college financial aid offices can provide guidance before submission. This thread has transformed what felt like an impossible task into something manageable. Thank you all for sharing your experiences and helping fellow parents navigate this confusing process!

As a newcomer here, I just wanted to add my experience to this discussion! I was in the same boat as Jessica with our Roth IRA and was so confused by the FAFSA instructions. After reading through all these responses, I feel much more confident about excluding our retirement accounts from the assets section. What really helped me was the distinction everyone made between the account balance (which doesn't count) versus any contributions or conversions that show up on your tax return (which do count as income). I also wanted to mention that I found it helpful to print out the relevant pages from that Federal Student Aid handbook that Noah mentioned - having the official documentation on hand made me feel better about our reporting decisions. Thanks to everyone for sharing their experiences and making this less stressful for those of us going through it for the first time!