FAFSA investment reporting confusion - Employer retirement stocks count?

If they're specifically designated as retirement accounts, you DO NOT include them, regardless of whether they're stocks or not. The FAFSA is looking at the purpose of the account, not the specific investment vehicle. So if these stocks are part of your husband's employer-sponsored retirement plan (sounds like it might be an ESPP specifically for retirement), then they're excluded just like a 401k would be.

i included my husbands work stocks on our fafsa and got almost no aid for my son!! wish i had known this sooner ughhh

This is actually a very common point of confusion. The key determining factor is whether the account is specifically designated as a retirement account with penalties for early withdrawal. The official FAFSA guidance states you should NOT report: - 401(k) plans, pension funds, annuities - IRAs and Keogh plans - **Employer retirement plans** of any type with early withdrawal penalties You SHOULD report: - Regular brokerage accounts with stocks - Stock investments not in retirement plans - 529 plans (though these have special rules) So your husband's employer stock plan, if structured as a retirement vehicle with age restrictions for access, should NOT be reported on the FAFSA.

I've helped dozens of families with FAFSA applications and this exact question comes up ALL THE TIME. Let me be super clear: employer-sponsored retirement plans are NOT reported on the FAFSA, regardless of whether they're invested in stocks, bonds, or mutual funds. The investment vehicle doesn't matter - it's the purpose and access restrictions that count. The rule is simple: if it's a designated retirement account with penalties for early withdrawal, DO NOT include it in your FAFSA assets. This includes your husband's employer stock plan if it's specifically for retirement. This is one reason why the FAFSA causes so much confusion and why so many families report their assets incorrectly, potentially losing thousands in aid.

wait but what if the stocks can be sold before retirement? my dad has company stocks he can technically sell anytime but they're supposed to be for retirement... do those count?

I'm confused about something related to this... If my parents have a Roth IRA that's invested in stocks, do they report that? What about my dad's pension that allows him to take a loan against it? The FAFSA instructions are so unclear!

Thank you all so much for the helpful responses! This really clarifies things. I won't include my husband's employer retirement stocks on our FAFSA. It's definitely a retirement account with early withdrawal penalties - he can't access it until he's 59½ without major penalties. I'm relieved because this retirement account is one of our larger assets, and including it would have dramatically increased our SAI score. Sometimes the FAFSA instructions feel deliberately confusing! I appreciate everyone sharing their expertise.

Im in same boat the entire FASFA is SOOO complicated why do they make it so hard for reg people to understand!!! We shldnt need a degree just to get $ for our kids degrees SMH

As someone who's been through this process multiple times, I can confirm what others have said - employer retirement plans are excluded regardless of the investment type. The confusion often comes from the FAFSA's wording about "stocks and bonds" but that refers to regular investment accounts, not retirement-designated accounts. One tip: if you're ever unsure about a specific account, look at your tax documents. If it's reported on forms like 1099-R (with retirement distribution codes) or if contributions reduce your taxable income, it's almost certainly a retirement account that shouldn't be reported on FAFSA. Also worth noting - this distinction can make a HUGE difference in your Student Aid Index (SAI). Retirement assets aren't assessed at all, while regular investments are assessed at about 5.6% for parents. So getting this right could potentially save you thousands in expected contributions!

Just wanted to chime in as someone who made this exact mistake two years ago! I included my spouse's employee stock purchase plan (ESPP) that was designated for retirement and it absolutely killed our aid eligibility. Took months to get it corrected through the financial aid office. The way I understand it now: if you can't access the funds without penalties until retirement age AND it's through an employer-sponsored retirement program, don't report it. Period. The fact that it's invested in company stock instead of mutual funds is irrelevant - it's still a qualified retirement plan. For anyone reading this thread who already submitted their FAFSA with retirement assets included, definitely contact your school's financial aid office ASAP about a correction. They can usually help you fix it, and the difference in your aid package could be substantial!