FAFSA access to retirement savings accounts for widow over 60 - what's reported?

Yes, FAFSA does ask about savings accounts under parent assets, but there are important considerations in your situation. First, as of the 2024-2025 FAFSA, they simplified the asset reporting. You'll need to report regular savings accounts, but there's an Asset Protection Allowance based on your age. At 62, you're entitled to shelter a significant portion of your assets from consideration in the SAI (Student Aid Index) calculation. Additionally, as a widow receiving Social Security death benefits, your income situation will be factored favorably into the calculation. Retirement-specific accounts like 401Ks and IRAs are not reported on FAFSA at all.

my mom was in similar sitation last yr. they DO look at regular savings but not retirement accts. if the money isnt in a official retirement acct like IRA it counts as assets. sorry :/

I can share what happened in my situation, which might help. I'm also in my 60s with savings intended for retirement. For FAFSA purposes, what matters is the TYPE of account, not how you personally categorize the funds. Here's the breakdown: - Not reported: 401k, 403b, pension plans, IRAs, Roth IRAs - Must be reported: Regular savings accounts, CDs, money market accounts, brokerage accounts However, there's good news about the Asset Protection Allowance - at age 62, a significant portion of your assets are protected from the calculation. Also, if your income is primarily Social Security death benefits, that works in your favor with the new FAFSA calculation for the 2025-2026 year.

The system is SO UNFAIR to people who saved responsibly!!! I put away money my whole life instead of spending it all, and now my kid gets PUNISHED with less aid while people who spent everything get full rides. Why should you be penalized for having emergency savings??? The whole FAFSA system is designed to PUNISH responsible parents!!

have u tried calling the Federal Student Aid number? my daughter had EXACT same issue and we couldnt figure it out online, but the guy on the phone explained everything. took FOREVER to get through tho, kept getting disconnected after waiting like an hour each time

The Asset Protection Allowance for the 2025-2026 FAFSA for a single parent age 62 should be approximately $14,600-16,500. That means that amount of your assets won't be counted at all. Then for any remaining assets, only about 5.6% of the value is counted in the SAI calculation. So even with $187,000 in savings, only about ($187,000 - $15,500) × 5.6% = approximately $9,600 would be added to your SAI. Also, with the expanded Pell Grant eligibility in the new FAFSA, your income being primarily Social Security survivor benefits might qualify your daughter for Pell regardless of your savings.

One strategy to consider: if you're still able to contribute to an IRA, you could move some of your savings there before completing the FAFSA. For 2025, the IRA contribution limit for someone over 50 is $8,000 ($6,500 base + $1,500 catch-up). This would effectively shelter that amount from FAFSA consideration. Just make sure you're eligible to contribute based on any earned income requirements.

I want to thank everyone for their incredibly helpful responses. Just to summarize what I've learned: 1. My regular savings accounts DO count as assets for FAFSA, even though I use them for retirement 2. At age 62, I get an Asset Protection Allowance of about $15,500 3. Only about 5.6% of my remaining assets affect the SAI calculation 4. I should look into moving some money to an IRA if possible 5. My Social Security survivor benefits may help qualify my daughter for Pell Grants This community has been amazing - I was so stressed about this, and now I feel like I can approach the FAFSA with much more confidence.