Five Facts on Planning for the Cost of College

Ian Kloc • May 28, 2024

It is no secret that the cost of college has skyrocketed in recent years. In fact, college tuition has increased faster than inflation for four decades, even doubling and tripling the inflation rate

in some years. With no end in sight to the increasing cost of college, planning for how to pay for

this higher education is becoming an increasingly crucial part of the financial planning process.

Moreover, the college application process is complex and often intimidating. This can cause

families to miss out on opportunities that could have ended up decreasing this huge price tag.

With that, here are five facts that many families are unaware of when beginning to pay for

college.


1. There is no income amount that disqualifies a family from receiving need based

aid. One of the largest mistaken assumptions families make each year is claiming that “I

make too much, I will never qualify for need based aid.” Each family’s need is calculated

using the Student Aid Index (SAI) on the Free Application for Student Aid (FAFSA). This

will take into account the parents’ income, assets, and the student’s income and assets.

This will generate a number that will determine how much aid, if any, a student will

qualify for. However, some assets must be reported with FAFSA, while others do not. For

some families, simple asset repositioning strategies can help them qualify for aid that

they otherwise would not have received.


2. College planning does not begin when the student is nearing graduation. The most

important contribution to college is a prepared student. GPA is cumulative and begins

the day the student walks into high school their freshman year. When it comes to

qualifying for need based aid, the income is determined by the parents’ base year. This

is the year from January of the student’s sophomore year to December of their junior

year. In other words, the full calendar year before their senior year. Any decisions you

make during your student’s base year will directly affect your qualification for need based

aid. When it comes to saving and planning for college, it is never too early to plan.


3. If a family does not qualify for need based aid, there are still strategies to

indirectly minimize the cost of college. There are several vehicles that can utilize tax

advantaged and asset advantaged strategies to save for college. Determining how to

save for college with the maximum asset growth and minimum tax liability can still save

families money. Commonly known funding vehicles such as section 529 plans work

effectively for some. However, there are limitations to what the funds can be used for.

What if the student does not wish to continue their education? There are other tools that

are more flexible and can be useful for certain families.


4. There is a difference between sticker price and net price. The sticker price is the

posted Cost of Attendance (COA) at each school. However, need and merit based aid

must be factored in before determining the net price, or what a family actually pays to

attend that school. Often schools with a high sticker price will be more willing to give aid

to a qualified student, which could result in the net price being lower than a school with a

low sticker price, but reluctant to give out aid.


5. The loan crisis is not all with the students, much of it is with the parents. Once

again, college is expensive. Some families may need to utilize loans to help pay for the

cost of college. There are several various public and private loans that families can use.

However, some are very open to pitfalls because of financial mistakes. There are a lot of

headlines today discussing the student loan crisis, but it is a bit misconceived. While

there are certainly outlying students who are stuck with six figures of debt, the real crisis

is with the parents. In many cases, parents are capable of borrowing the entire cost of

college. This has led to parents borrowing back way more than they could afford to pay

back before retirement. This has caused families to have to push back their retirement in

order to generate adequate income to pay off these loans. The important takeaway here

is that covering the cost of college should never come at the expense of a successful

retirement.

By Jonathan McQuade April 1, 2025
Trading goods has been around for millennia - with early written documentation beginning with the silk road to the industrial and now digital revolution - the exchange of goods has led to an interconnected world where products and services change hands between cultures and countries. Globalization (the exchange of goods) started to play a central role in global Gross Domestic Product (GDP): a measure of the total value added from the production of goods and services in a country or region each year with exports accounting for approximately 13% of world GDP in 1970 and near 30% in 2023, according to the World Bank.  Tariffs have been one of the major headlines as Donald Trump entered the Oval Office for his second term as President. To prime the discussion and apply it to current events, it seems judicious to take a moment and look back at the role tariffs have played in policy for the United States. Tariffs are essentially a tax on goods and/or services imported to the United States paid for by the business importing the goods and typically passed onto the consumer in the form of an increase in price of that good. An increase in tariff rates is meant to discourage trade as it makes goods more expensive to buy from other countries compared to buying domestic goods to which the tariff does not apply. Major economies, 23 countries in total, entered the General Agreement on Tariffs and Trade (GATT) in 1947 to lower tariff rates and other trade barriers to encourage trade. This is perhaps what makes President Trump’s stance to raise tariffs more controversial. A look back in U.S. history will show that tariffs were the government’s primary revenue source prior to 1913, when the 16th Amendment introduced the federal income tax. Today, tariff revenues make up less than 2% of the $4.9 trillion in total tax revenue for 2024, with the majority coming from individual and corporate income tax. Given that tariffs are no longer a major element of domestic tax policy, what role do tariffs play in broader economic and policy goals? The implementation of tariffs are now primarily used as a tool to protect and regulate trade practices that could injure domestic industry, advance foreign policy goals or as negotiating leverage in trade negotiations, according to a paper titled: “U.S. Tariff Policy: Overview” by the Congressional Research Service. For policy, the potential benefits are clear. Economically, the benefits are less clear. Retaliatory tariffs, rising costs, and supply chain disruptions all bring into question whether tariffs will result in the desired outcome of benefitting the U.S. consumer.
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Dear Clients and Friends,
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Key Takeaways You don’t need millions to hire a wealth manager—many firms offer services starting at $250,000 in assets. Wealth managers provide more than investment advice—they handle estate planning, tax strategy, retirement, and more. Signs you may need one include financial complexity, major life changes, or a sudden increase in wealth. Human advisors still play a vital role—especially for those needing personalized strategies beyond what robo-advisors can offer. Choosing the right wealth manager means looking at credentials, fee transparency, and how well they align with your goals. Hiring a Wealth Manager: What It Costs and When It’s Worth It Wealth management is a comprehensive financial service that goes beyond basic investment advice. It involves managing an individual's or a family's financial portfolio, including investments, estate planning, retirement strategies, and tax optimization. A wealth manager takes a holistic approach to ensure that financial goals are met while minimizing potential risks. As financial situations become more complex, individuals with substantial assets often need specialized expertise to preserve, grow, and transfer their wealth. Here, we discuss specific life circumstances in which you may consider hiring a wealth manager. When to Consider Hiring a Wealth Manager Knowing when to engage a wealth manager can make a significant difference in protecting and growing your assets. While some individuals manage their own investments successfully, others may reach a point where professional expertise becomes essential. Here are clear signs that it might be time to hire a wealth manager: 1. Increasing Complexity of Your Financial Portfolio As financial portfolios grow, they often include a mix of assets such as stocks, bonds, real estate, private equity, and business interests. Managing these diverse holdings requires time, expertise, and a thorough understanding of market dynamics. Wealth managers develop cohesive strategies to balance risk and reward across multiple asset classes. They monitor and adjust portfolios to maintain alignment with long-term financial goals. 2. Approaching Retirement or Major Life Transitions Significant life events, such as retirement , marriage, divorce, inheritance, or the sale of a business , often bring financial complexities that require careful planning. Without expert guidance, it's easy to overlook key factors that can affect long-term security. Wealth managers help clients navigate these transitions with tailored financial strategies. They optimize retirement withdrawals, manage pensions, and ensure that wealth is preserved for future generations. 3. Significant Wealth Growth or Inheritance A sudden increase in wealth—whether through inheritance, business success, or investment growth—can present unexpected challenges. Managing newfound wealth requires careful planning to avoid unnecessary tax burdens and ensure sustainable growth. Wealth managers provide strategic asset allocation and diversification to mitigate risk. They offer estate planning solutions to preserve wealth and minimize tax liabilities. 4. Difficulty Managing Tax Strategies and Estate Planning Tax optimization and estate planning are critical aspects of long-term wealth management. Without expert advice, high-net-worth individuals may face unnecessary tax burdens—such as higher-than-necessary capital gains taxes or overlooked opportunities for charitable deductions —or end up with ineffective estate plans that complicate wealth transfer. Wealth managers identify opportunities to minimize taxes through tax-efficient investments and charitable giving. They structure trusts and wills to ensure seamless wealth transfer while minimizing estate taxes. How Much Money is Required for Wealth Management? Wealth management services typically require clients to meet a minimum asset threshold. While requirements vary by firm, most wealth managers cater to individuals with investable assets starting at: Mass Affluent Clients: $250,000 to $1 million High-Net-Worth Individuals (HNWIs): $1 million to $5 million Ultra-High-Net-Worth Individuals (UHNWIs): $5 million and above. 5 Benefits of Hiring a Wealth Manager Hiring a wealth manager can deliver meaningful value when your financial situation becomes more complex. Their services go far beyond investment advice, offering comprehensive strategies to help you manage, protect, and grow your wealth over time. Below are five concrete benefits of working with a wealth manager: 1. Customized Financial Strategy Wealth managers develop tailored financial plans based on your unique goals, lifestyle needs, and risk tolerance. They coordinate various elements such as investment planning, retirement goals, estate planning, and cash flow. This unified approach ensures that each financial decision supports your broader objectives. Rather than offering one-size-fits-all advice, they align strategies to your personal circumstances. 2. Ongoing Portfolio Management and Oversight A strong financial strategy requires ongoing attention, especially as markets shift and personal goals evolve. Wealth managers actively monitor and rebalance portfolios to maintain proper asset allocation and performance. They also adjust strategies in response to changes in your life or the economic environment. This hands-on oversight helps reduce risk, optimize returns, and keep your investments aligned with your objectives. 3. Tax Efficiency and Wealth Preservation Tax strategy is a core part of preserving and maximizing wealth. Wealth managers use techniques such as tax-loss harvesting, asset location, and charitable giving to reduce tax liabilities. They also help structure trusts and estate plans to minimize taxes across generations. With proper planning, more of your wealth stays working toward your goals rather than being lost to unnecessary taxes. 4. Legal and Regulatory Compliance Wealth managers ensure your financial decisions remain compliant with current tax laws, estate regulations, and investment policies. They review key legal documents like wills, trusts, and account structures to keep them current and effective. Their awareness of potential legal risks helps clients avoid costly errors or disputes. This layer of protection supports long-term financial stability. 5. Objective, Professional Guidance A wealth manager offers an informed, unbiased perspective during important financial decisions. They help clients stay disciplined, especially in volatile markets or emotionally charged situations like business transitions or inheritance. Their guidance ensures decisions are made with clarity and consistency. With professional support, clients can navigate complexity with greater confidence and peace of mind. Exploring 4 Specialized Wealth Management Services Wealth management extends far beyond basic investment advice. It encompasses a range of specialized services aimed at preserving and growing wealth while ensuring that financial goals are met efficiently. For individuals with complex financial needs, wealth managers provide a holistic approach by integrating investment management, estate planning, charitable giving, and retirement security into a cohesive strategy. Below are the key specialized services offered by wealth managers. 1. Financial Planning and Tax Strategies Effective financial planning includes smart tax strategies to grow and protect wealth over time. Wealth managers help reduce taxable income through tools like loss harvesting and tax-efficient investments. They also plan for intergenerational wealth transfer with minimal tax impact. 2. Estate Planning and Legacy Preservation Estate planning helps ensure wealth is passed on smoothly and with minimal tax burden. Wealth managers structure wills and trusts to protect assets and maintain control over how they’re distributed. These strategies also help prevent legal issues and support legacy goals. 3. Philanthropic and Charitable Giving Wealth managers help clients give intentionally and efficiently through charitable trusts and donor-advised funds. These tools offer immediate tax benefits and long-term impact for causes that matter. Strategic giving also supports estate planning and legacy goals. 4. Retirement Planning and Security Planning for retirement means balancing income needs with long-term growth and stability. Wealth managers develop income strategies that consider Social Security, pensions, and required withdrawals. They also work to protect retirement savings from market risks and tax erosion. What to Look for When Hiring a Wealth Manager 1. Credentials and Experience Matter When selecting a wealth manager, credentials such as Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) indicate expertise and a commitment to ethical standards. Experienced wealth managers with a track record of managing complex portfolios are better equipped to handle sophisticated financial needs. 2. Fee Transparency and Fiduciary Duty It’s essential to understand how a wealth manager is compensated. Fee structures may be based on: A percentage of assets under management (AUM) Flat or hourly fees. Additionally, ensure that the wealth manager operates as a fiduciary , which means they are legally obligated to act in your best interest. 3. Communication and Personal Fit Choosing a wealth manager who communicates clearly and understands your financial objectives is key. Look for someone who: Provides regular updates and performance reviews. Is accessible and responsive to your questions. Builds a relationship based on trust and transparency. Conclusion: Making Informed Decisions About Wealth Management Wealth management is a comprehensive approach to managing, growing, and preserving wealth across generations. For individuals with complex financial portfolios, significant assets, or unique financial goals, hiring a wealth manager can provide invaluable expertise and peace of mind. If you’re uncertain about your next financial move, schedule a consultation with Boyce & Associates Wealth Consulting to provide the clarity you need. Professional guidance can make all the difference when planning for your financial future. To get started, visit our website or schedule a consultation. . FAQs What’s the difference between a financial advisor and a wealth manager? A financial advisor primarily focuses on investment advice and retirement planning, while a wealth manager provides a more comprehensive service that includes estate planning, tax optimization, and legacy preservation. Wealth managers are better suited for clients with complex financial needs. What fees should I expect when hiring a wealth manager? Wealth managers typically charge a percentage of assets under management (AUM), usually ranging between 0.50% and 1.5% annually. Some may also offer flat fees or hourly rates depending on the scope of services provided. Can wealth management help with tax reduction strategies? Yes, wealth managers use advanced tax optimization strategies such as tax-loss harvesting, charitable giving, and structuring trusts to minimize tax liabilities. They ensure that clients’ investment portfolios are managed in a tax-efficient manner to maximize after-tax returns. Disclaimer Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable but are not assured as to accuracy. Past performance is not indicative of future results. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. Risks: All investments, including stocks, bonds, commodities, alternative investments and real assets, should be considered speculative in nature and could involve risk of loss. All investors are advised to fully understand all risks associated with any kind of investing they choose to do. Hypothetical or simulated performance is not indicative of future results. Investment advisory services offered through Boyce & Associates Wealth Consulting, Inc., a registered investment adviser. Boyce & Associates Wealth Consulting, Inc. has Representatives Licensed to sell Life Insurance in TX and other states.
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Dear Clients and Friends,
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