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College aid and the year you retire

Last updated October 20, 2026

Federal college aid is worked out from your tax return two years before each school year. So the year you retire decides which of your child's aid applications see a working year's income and which see retirement income.

Each school year's application, the FAFSA, reads the tax return from two years earlier: aid for the 2026–27 school year uses 2024 income. A child who starts college in fall 2031 has four applications, which read your returns for 2029, 2030, 2031 and 2032.

In retirement, withdrawals from retirement accounts count as income on the application, and so do Roth conversions. The balances in retirement accounts, such as a 401(k) or an IRA, don't count as assets.

When your plan has a child whose college years fall near the year you retire, your dashboard and the Household section show which years their applications will read. It names the years and the rules; whether any of it changes your plans is yours to weigh.

Many private colleges also ask for the CSS Profile, which has its own rules and can count more than the FAFSA does.