Do my retirement accounts hurt my child's financial aid?
Generally no – this is one of the most reassuring facts in aid planning. The FAFSA's formula does not count the balances in qualified retirement accounts like your 401(k), 403(b), traditional IRA, or Roth IRA as assets, so a large nest egg won't raise your Student Aid Index. The same goes for the equity in your primary home on the federal form. That's a big reason financial planners say not to drain retirement savings to pad a 529 or cash – you'd be moving money from a sheltered bucket into a counted one. Two cautions: contributions you make in the FAFSA's tax year get added back to income, and the CSS Profile at some private schools does weigh home equity and may probe further. But for federal aid, keep funding retirement. Confirm your trajectory at wealthserene.com/tools/retirement-planner.