The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, represents the most significant tax reform since the Tax Cuts and Jobs Act. While the Trump tax policy affects all taxpayers, high-income earners face particularly notable changes that could substantially impact their tax strategies and liabilities.
Permanent TCJA Provisions with Modifications
The OBBBA makes permanent many provisions from the Tax Cuts and Jobs Act that were set to expire, but with key modifications affecting wealthy taxpayers. The seven-bracket tax structure is now permanent, providing certainty for long-term tax planning.
2026 Federal Tax Rates for Single Taxpayers
| Current Law (TCJA Expires) | House Republican Tax Bill | |||
|---|---|---|---|---|
| Rate | Taxable Income at Which Rate Begins | Rate | Taxable Income at Which Rate Begins | |
| 1st bracket | 10% | $0 | 10% | $0 |
| 2nd bracket | 15% | $12,150 | 12% | $12,375 |
| 3rd bracket | 25% | $49,300 | 22% | $50,275 |
| 4th bracket | 28% | $119,400 | 24% | $107,200 |
| 5th bracket | 33% | $249,100 | 32% | $204.700 |
| 6th bracket | 35% | $541,550 | 35% | $259,925 |
| 7th bracket | 39.6% | $543,800 | 37% | $639,275 |
2026 Federal Tax Rates for Married Taxpayers
| Current Law (TCJA Expires) | House Republican Tax Bill | |||
|---|---|---|---|---|
| Rate | Taxable Income at Which Rate Begins | Rate | Taxable Income at Which Rate Begins | |
| 1st bracket | 10.0% | $0 | 10% | $0 |
| 2nd bracket | 15.0% | $24,300 | 12% | $24,750 |
| 3rd bracket | 25.0% | $98,600 | 22% | $100,550 |
| 4th bracket | 28.0% | $199,000 | 24% | $214,400 |
| 5th bracket | 33.0% | $498,200 | 32% | $409,400 |
| 6th bracket | 35.0% | $541,550 | 35% | $519,850 |
| 7th bracket | 39.6% | $611,750 | 37% | $767,150 |
The expanded standard deduction is also permanent. Amounts for 2025 are set at $31,500 for married filing jointly and $15,750 for single filers.
SALT Deduction: A Mixed Bag for High Earners
One of the most impactful changes for wealthy taxpayers involves the State and Local Tax (SALT) deduction. The Trump tax policy raises the cap from $10,000 to $40,000 for taxpayers with modified adjusted gross income (MAGI) under $500,000 ($250,000 for married filing separately).
However, high earners face a phaseout mechanism. Those with MAGI over $500,000 see their SALT deduction cap gradually reduced by 30% until it reaches the original $10,000 limit. The cap and income threshold will increase by 1% annually, providing modest inflation protection.
New Deduction Limitations and Caps
Starting in 2026, the OBBBA introduces an itemized deduction cap specifically targeting the highest earners. Taxpayers in the top 37% tax bracket will find their itemized deductions limited to providing a tax benefit equal to only 35 cents per dollar deducted, rather than the full 37 cents they would otherwise receive.
Additionally, charitable deductions face new restrictions for itemizers. Beginning in 2026, those who itemize must reduce their charitable deduction by 0.5% of their contribution base (generally adjusted gross income). For a taxpayer with $1 million in AGI, this means reducing their charitable deduction by $5,000, potentially eliminating the benefit of smaller charitable contributions.
Limited Benefits from New Deductions
While the Trump tax policy introduces several new deductions for overtime pay and tips, these provide minimal benefit to high earners due to income caps and phaseout provisions. The overtime deduction phases out starting at $150,000 for single filers and $300,000 for joint filers. Tips deductions have similar phase-out thresholds.
The new car loan interest deduction, limited to $10,000 of qualified interest on U.S.-assembled vehicles, phases out at 20% for MAGI over $100,000 (single) or $200,000 (joint), making it largely irrelevant for high earners.
Capital Gains Tax Considerations
The 2025 legislation keeps long-term capital gains rates at 0%, 15%, and 20%, depending on income levels. High earners remain subject to the net investment income tax (NIIT), potentially increasing effective rates. Strategic planning, such as tax-loss harvesting and asset location optimization, can help reduce capital gains exposure.
Timing the sale of high-value assets can influence tax outcomes significantly under the Trump tax policy. Executing gains in lower-income years or pairing gains with offsetting losses can minimize total taxation. Careful consideration of these strategies is critical for multi-million-dollar portfolios.
Investors should also consider holding or gifting assets through tax-efficient structures. Trusts, family limited partnerships, and charitable vehicles can provide both immediate and long-term tax advantages. Integrating these approaches into a broader wealth strategy ensures alignment with financial goals.
Education Tax Benefits Made Simple
While new education tax benefits may not apply to you as a high-income earner, these may apply to those you employ, especially if you are assisting with student debt.
New Rules Starting in 2026
Beginning in 2026, several education-related tax breaks will become available, but there's an essential requirement: the person benefiting must have a Social Security number that allows them to work in the United States.
One significant change involves student loan forgiveness. If someone's student loans are cancelled because they become permanently disabled or pass away, they won't have to pay taxes on that forgiven debt amount. Previously, cancelled debt was often considered taxable income, creating an additional burden during already difficult circumstances.
The American Opportunity Credit and Lifetime Learning Credit will continue helping families reduce their tax bills when paying for higher education. However, there's a new paperwork requirement: you'll need to include the school's federal tax identification number when filing your taxes.
Employer Help With Student Loans Gets Permanent Status
Starting in 2026, a popular workplace benefit becomes a permanent part of the tax code. Employers can now contribute up to $5,250 each year to help pay down their employees' student loan debt without the employee owing taxes on this assistance. This amount will increase with inflation over time, making it more valuable in future years.
This Trump tax policy benefit works similarly to employer tuition assistance programs, where the company's contribution doesn't count as taxable income to the worker. It's a win-win situation that helps employees tackle their debt while giving employers a valuable recruiting and retention tool.
New Credit for Supporting Scholarships
Starting in 2027, taxpayers who donate money to qualifying scholarship organizations can receive a federal tax credit for their generosity. This credit is worth up to $1,700, which directly reduces your tax bill dollar-for-dollar rather than just reducing your taxable income.
However, if your state also offers tax credits for scholarship donations, your federal credit will be reduced by whatever state credit you claim. For example, if you receive a $500 state tax credit for a scholarship donation, your federal credit would be limited to $1,200 instead of the full $1,700. This prevents "double-dipping" but still provides meaningful tax benefits for supporting educational opportunities.
International and Transfer Taxes
A new 1% excise tax on foreign money transfers takes effect in 2026, potentially affecting high-net-worth individuals who regularly send money abroad through money orders, cashier's checks, or similar instruments.
Estate and Gift Tax Considerations
While not explicitly detailed in the available provisions, high-income earners should note that the OBBBA's focus on making TCJA provisions permanent likely extends to estate and gift tax exemptions, though specific amounts and provisions require further clarification.
Strategic Planning for High Earners
For high-income taxpayers, the OBBBA creates both opportunities and challenges. The permanent nature of many provisions allows for longer-term tax planning, but the new limitations require careful analysis of optimal deduction strategies.
High earners should implement comprehensive strategies to address anticipated Trump tax policy changes. This includes maximizing contributions to retirement accounts, exploring philanthropic opportunities, and reviewing the timing of income realization. Regular scenario modeling allows families and business owners to evaluate multiple outcomes with confidence.
Charitable giving may become increasingly valuable under new legislation. Contributions to donor-advised funds or family foundations can provide tax benefits while aligning with personal values. Structured giving also supports multi-generational wealth transfer objectives and long-term philanthropic goals.
Engaging with financial professionals allows individuals to create personalized strategies for tax, investment, and estate planning. This collaborative approach reduces risk and improves the likelihood of achieving long-term objectives. Proactive planning positions high earners to preserve wealth while adapting to evolving policies.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
Affluent investors increasingly look to private credit for access to institutional-level opportunities that enhance wealth strategies. Beyond attractive yields, it supports income approaches aligned with complex liquidity needs and multi-generational priorities. Its greatest strength comes from complementing traditional assets while reinforcing stability across shifting economic and market environments.
Why Private Credit Is Gaining Ground
Institutional demand for private credit continues to expand, with US private credit markets growing from about $46 billion in 2000 to nearly $1 trillion by 2023, according to the Boston Federal Reserve. This trajectory highlights the rising appetite for strategies that generate steady, risk-adjusted income in changing conditions. For high-net-worth investors, the expansion signals growing confidence in an asset class once considered highly specialized.
For high-net-worth individuals, this trajectory represents more than market growth; it signals democratization of sophisticated lending strategies once exclusive to pensions, endowments, and sovereign wealth funds. Direct lending, mezzanine financing, and distressed debt each offer distinct risk-return profiles, but all require disciplined evaluation and careful manager selection.
Superior Yields with Reduced Market Correlation
Private credit's appeal extends beyond yield enhancement. Unlike traditional fixed-income instruments, private lending structures often show lower correlation with public market volatility, creating income streams that persist through economic stress and market disruption.
This independence proves especially valuable for retirees seeking stable distributions, entrepreneurs managing liquidity events, or families funding philanthropic initiatives. Business owners find predictable returns particularly useful during succession planning or capital expansion phases, where cash flow certainty supports strategic decision-making.
The underlying mechanics reinforce this stability: lending structures typically secure terms against tangible, high-quality assets, providing downside protection while enabling participation in economic recoveries.
Strategic Integration Maximizes Portfolio Benefits
Private credit achieves its greatest impact when thoughtfully integrated into comprehensive wealth planning. Rather than functioning as a standalone investment, it works best as part of a coordinated strategy that addresses current income needs while advancing long-term legacy objectives.
Planning considerations must encompass tax treatment, estate implications, and correlations with existing holdings. Within this framework, private credit serves dual purposes: providing portfolio stabilization during volatile periods while contributing to wealth accumulation across generations.
Manager Selection: The Critical Success Factor
Attractive yields mean little without proper execution. Manager quality often determines whether private credit delivers consistent results or encounters avoidable setbacks. Key evaluation criteria include:
- Underwriting standards and borrower quality assessment
- Track record through complete credit cycles, particularly downturns
- Fee transparency and alignment of manager capital with investor interests
- Operational infrastructure and risk management capabilities
A manager's ability to preserve capital during challenging periods often proves more revealing than performance in favorable conditions. This discipline separates sustainable performers from those benefiting primarily from accommodating market environments.
Integrating Private Credit into Wealth Planning
The rise of private credit reflects evolving investor demands for strategies that balance wealth preservation with growth objectives. As institutional-quality access becomes increasingly available to individual investors, private credit appears positioned for a lasting role in diversified portfolio construction.
The asset class addresses fundamental investor needs: consistent income generation, reduced correlation with traditional markets, and participation in lending opportunities historically reserved for large institutions. These characteristics suggest private credit will continue expanding beyond its current trillion-dollar footprint.
If you're considering whether private credit belongs in your investment mix, I'd be glad to walk you through the potential benefits and trade-offs. Together, we can explore how it might strengthen your overall financial strategy.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
Artificial intelligence has become one of the most significant themes shaping today’s financial markets. The rapid pace of AI investment has created opportunities for growth, but it has also sparked concerns about speculation and overvaluation. Investors are now asking how to benefit from AI-driven innovation without exposing portfolios to unnecessary risk.
The challenge is balancing enthusiasm for transformative technologies with the discipline required to preserve long-term wealth. Managing exposure, evaluating fundamentals, and diversifying across industries all play critical roles in building a sustainable strategy. With thoughtful planning, investors can pursue AI-driven opportunities while protecting against concentration risk.
The AI Investment Surge: Opportunities and Concerns
AI investment has surged across both public and private markets, with companies racing to develop transformative technologies. A recent report from Stanford and the Hoover Institution found AI added over $400 billion to the U.S. economy in 2024. Projections suggest this impact could grow to $4.4 trillion by 2030, reinforcing why investors are paying close attention.
However, rapid growth often breeds speculation. Valuations for many AI-focused companies have expanded dramatically, sometimes without corresponding profits or proven business models. History shows that while markets reward genuine innovation, overpaying for growth potential can lead to severe corrections when reality doesn't meet expectations.
Concentration Risk in Technology Portfolios
The AI surge has amplified concentration risks, particularly in technology-heavy portfolios. Many broad market indices now reflect heavy weighting toward a small number of mega-cap tech companies, creating vulnerability to sector-specific downturns. For high-net-worth investors, significant exposure to these stocks can result in substantial losses if market conditions shift unexpectedly.
Stress testing portfolios under various scenarios helps reveal potential vulnerabilities. Wealth managers routinely model outcomes if leading technology names experience major price declines, ensuring clients understand their risk exposure and can make informed decisions about portfolio adjustments.
Diversification Beyond AI Investment
A simple comparison highlights the trade-offs between concentrated and diversified portfolios:
| Portfolio Type | Characteristics | Risks | Benefits |
|---|---|---|---|
| Concentrated (AI/Tech-heavy) | Few mega-cap stocks dominate allocation | High volatility, sector downturns | Potential for outsized short-term gains |
| Diversified (Multi-sector) | Mix of tech, healthcare, consumer staples, fixed income | Lower exposure to tech downturns | More stable, balanced long-term growth |
Effective risk management requires expanding beyond AI and technology sectors. A balanced approach might include allocations across healthcare, industrials, consumer staples, and fixed income to provide stability during periods of tech volatility. These non-correlated assets help smooth returns and preserve capital.
For instance, pairing technology growth stocks with dividend-paying companies in defensive sectors can generate steady income while maintaining innovation exposure. Alternative investments, including private equity, real estate, and infrastructure, offer additional diversification benefits through returns that typically don't correlate with traditional equity markets.
Fundamentals Over Hype
Sustainable investment success demands grounding decisions in solid fundamentals rather than momentum-driven speculation. AI opportunities should undergo the same rigorous evaluation applied to any sector: earnings growth potential, cash flow generation, competitive positioning, and reasonable valuation metrics.
The dot-com era serves as a cautionary reminder of what happens when enthusiasm overwhelms analysis. Many companies attracted significant capital without viable paths to profitability, leaving investors exposed when market sentiment shifted. Today's AI landscape requires similar vigilance in distinguishing between genuine innovation and speculative hype.
Companies successfully integrating AI into real-world applications, whether in healthcare diagnostics, logistics optimization, or financial services, often demonstrate more sustainable business models than those relying purely on AI as a concept.
Long-Term Positioning with AI Investment
Effective wealth strategies require patience and discipline, especially when markets become captivated by emerging themes. AI investment should enhance, not dominate, a comprehensive financial plan designed to weather multiple market cycles.
Recent data from UBS shows AI adoption in the U.S. rose to 9.2% in Q2 2025, up from 5.7% in late 2024, indicating accelerating integration across industries. This growth trajectory supports strategic AI allocation while reinforcing the importance of measured positioning.
Regular portfolio reviews become essential as technology evolves and market dynamics shift. Scenario analysis, modeling both optimistic and conservative outcomes, helps maintain perspective during periods of volatility while keeping long-term objectives in focus.
Balancing Innovation and Stability
AI is shaping the future of technology and transforming investment landscapes, but prudent strategies remain essential. Managing concentration risk, prioritizing fundamentals, and maintaining diversification help capture AI-driven growth without compromising stability. Every investor’s circumstances differ, and thoughtful positioning is the key to sustainable success.
If you’re curious about how to participate in the AI investment surge without taking on unnecessary risk, I can help you evaluate where opportunities align with your broader portfolio goals. Let’s create a strategy that balances innovation with long-term stability.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
Wealth planning is fundamental to securing your financial future. However, many traditional approaches fail to address today’s economic complexities. For instance, inflation, fluctuating interest rates, and volatile markets constantly challenge static financial plans. Without adapting to these realities, wealth planning risks limiting your growth and resilience.
Adopting a more flexible and proactive approach allows investors to better navigate uncertainty. By incorporating active portfolio management, diverse asset classes, and technology-driven insights, investors create opportunities to protect and grow wealth. Join me as I explore why conventional methods may no longer be sufficient and how adaptive strategies can empower your financial security.
Inflation and Interest Rate Impacts on Wealth Planning
Inflation steadily erodes purchasing power and can dramatically reduce real investment returns over time. Unfortunately, traditional planning often underestimates this risk by relying heavily on fixed-income or cash allocations that fail to keep pace with rising prices. As a result, ignoring inflation’s impact threatens long-term wealth preservation.
Interest rate fluctuations add complexity, making it harder for investors to maintain stable portfolio income and growth. Rising interest rates usually cause bond prices to fall, which can reduce income and overall portfolio stability. Since static plans seldom adjust for changing rate environments, investors risk avoidable losses over time.
Understanding how inflation and interest rates interact is essential for modern wealth planning. Key considerations include:
- Increasing allocations to inflation-resistant assets
- Reviewing bond durations to minimize interest rate risk
- Adjusting income and withdrawal assumptions accordingly
According to recent research from McKinsey & Company, active management and scenario planning are critical to navigating these macroeconomic factors. Wealth planning that embraces flexibility around inflation and rates is, therefore, better positioned to protect purchasing power and sustain growth.
Moving Beyond “Set-and-Forget” Portfolios
Many investors rely on portfolios established years ago, which are reviewed infrequently and seldom updated. Consequently, this “set-and-forget” mentality assumes market conditions remain stable, which is rarely the case. Without ongoing oversight, portfolios risk becoming outdated and misaligned with evolving goals and risks.
Active portfolio management involves continual monitoring and tactical adjustments based on market signals. Using technology platforms that provide real-time analytics and scenario testing enables investors and advisors to respond swiftly to changing environments. The global portfolio management software market is projected to grow from USD 4.13 billion in 2024 to USD 9.37 billion by 2033, reflecting a compound annual growth rate (CAGR) of 9.52% .
Furthermore, active oversight enables risk management tailored to individual circumstances. Whether adjusting allocations or reallocating gains, this dynamic approach ensures portfolios remain aligned with clients’ wealth planning objectives over time. Therefore, transitioning away from static plans toward continuous stewardship can significantly enhance long-term outcomes.
Incorporating Alternative Assets for Diversification and Inflation Hedging
Traditional wealth planning focuses mainly on stocks, bonds, and cash, which might not protect well against inflation. Alternative assets like real estate, commodities, private equity, and hedge funds offer significant diversification benefits. These alternatives also serve as effective hedges against inflation and market downturns.
Some advantages of including alternative investments in financial planning include:
- Lower correlation with traditional markets, reducing overall portfolio volatility
- Income streams often linked to inflation preserve purchasing power
- Potential access to unique growth opportunities that are unavailable in public markets
Real assets often maintain value during inflationary periods, which helps support long-term capital preservation and stability. Additionally, private equity and hedge funds provide downside protection through active management and lower sensitivity to market swings. These alternatives contribute to a diversified portfolio that balances risk while pursuing growth in uncertain economic times.
As a result, this diversification strategy helps portfolios weather economic storms and adapt to shifting market conditions effectively. Incorporating alternative assets aligns financial planning with today’s market realities and evolving investor needs. Ultimately, a flexible approach strengthens financial resilience and supports long-term goals.
Adjusting Withdrawal Strategies to Preserve Principal During Downturns
Withdrawal strategies are essential for retirees and income-dependent investors to maintain and sustain their long-term wealth. Fixed withdrawal rates can quickly deplete principal during market downturns, threatening future financial security. Effectual approaches that adjust withdrawals based on market conditions help protect portfolios and extend retirement income. Examples include:
- Dynamic spending rules that reduce withdrawals during downturns
- Bucket strategies separating short-term liquidity from long-term investments
- Tax-efficient withdrawal sequencing to minimize tax impact
Leveraging Technology for Real-Time Portfolio Adjustments and Scenario Planning
Technology has transformed financial planning by providing real-time portfolio visibility and advanced modeling capabilities for investors. It can simulate “what-if” scenarios, stress test portfolios, and analyze income projections under varying conditions. These tools offer a deeper understanding of potential outcomes and enhance strategic decision-making.
Interactive dashboards and AI-powered analytics improve decision-making speed and accuracy, enabling investors to adapt their plans as market conditions change. This dynamic approach builds confidence by continuously aligning strategies with evolving financial realities.
Ultimately, integrating advanced technology enables proactive wealth planning that aligns with long-term goals while adapting to new challenges and economic shifts. This approach fosters financial resilience and supports sustained growth amid constant change.
Rethinking Wealth Planning: Embrace Adaptability to Secure Your Financial Future
Traditional planning methods are no longer efficient in today’s complex economy. They inevitably leave investors vulnerable to inflation and market volatility. Embracing an adaptive approach is essential to protect purchasing power while enabling sustainable growth over time.
By incorporating active portfolio management, alternative asset diversification, and technology-driven insights, you can create a resilient financial framework.
If you are considering how to make your plan more flexible or simply want to understand how these strategies could fit your goals, I’m here to help. Let’s develop a personalized approach that honors where you are today while preparing you for tomorrow’s opportunities.
ABOUT JEFF
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic wealth management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Arizona, Jeff works with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
By Jeff Gilbert
When you first held your child, did you dream about all the milestones they’d reach, perhaps even seeing them attend a top-tier college that sets the stage for their career? Most parents would say yes, but few fully understand the true cost of making that dream a reality. Even if you’ve started saving, do you have a complete strategy for the entire college planning process?
Many families have regrets due to common college planning mistakes. Here are four of the most frequent mistakes to keep in mind as you prepare to help your child embark on their higher education journey.
1. Starting the Planning Process Too Late
When a college education in the U.S. can cost upwards of $360,000 for an undergraduate degree at a top school and over $11,600 each year for in-state tuition alone at a public institution, it’s a good idea to start saving for your child’s education as early as possible.
And unfortunately, good intentions often won’t cut it. Parents might plan to take care of a portion or even all the college costs for their kids, but with competing financial goals like retirement planning and paying off a mortgage, it can be challenging to meet that commitment. The earlier you start planning, the easier it will be to accommodate multiple financial goals, and the more likely you will be to succeed.
In terms of other aspects of college planning, such as scholarship research, college visits, testing, career exploration, and crafting applications, you don’t want to run out of time or make decisions in a rush. You won’t regret starting too early, but you could very well regret winging it at the last minute.
2. Missing Financial Aid Deadlines
Most colleges require financial aid forms to be submitted by the beginning or middle of February, but that doesn’t mean you have to wait that long to submit them. Even if you don’t have all your tax information for the previous year, use estimates and amend amounts later. Some schools and states award financial aid on a first-come, first-served basis until it runs out, so apply for aid as soon as possible after January 1st. It could save you a big chunk of change.
3. Not Having a Career Game Plan
While you shouldn’t expect your teenager to know exactly what they want to do with the rest of their life, you can help them examine and explore different majors and career options. Work with your child to brainstorm their interests and skills and, instead of just picking colleges based on location or reputation, do the legwork to find colleges that will help your child succeed in their future career.
That could mean looking at schools that specialize in certain fields or ones that help students get internships or mentorships. If your child is unsure of what they want to do, make sure you pick a college that offers a variety of majors and has opportunities for students to switch majors without adding years to their education. With the rising costs of tuition, you want to maximize what your child is getting out of their college years.
4. Neglecting to Enlist Professional Support to Avoid College Planning Mistakes
College planning is complex and layered. Even if you’ve made a start, there are plenty of hidden pitfalls and opportunities that could either slow you down or give you an edge. No matter where you are in the journey, partnering with a professional with experience in college planning can help you avoid costly college planning mistakes, optimize your resources, and simplify the process.
If you want to steer clear of the most common pitfalls families face, we’d love to help. Give me a call at 949-445-1465 or email me at jgilbert@balboawealth.com.
Scottsdale office: 480-801-5010, info@balboawealth.com
About Jeff
Jeff Gilbert is the founder and CEO of Balboa Wealth Partners, a holistic financial management firm dedicated to providing clients guidance today for tomorrow’s success. With over three decades of industry experience, he has worked as both an advisor and executive-level manager, partnering with and serving a diverse range of clients. Specializing in serving high- and ultra-high-net-worth families, Jeff aims to help clients achieve their short-term and long-term goals, worry less about their finances, and focus more on their life’s passions. Based in Scottsdale, Jeff and Balboa work with clients throughout the entire country. To learn more, connect with Jeff on LinkedIn or email jgilbert@balboawealth.com.
Advisory services provided by Balboa Wealth Partners, Inc., an Investment Advisor registered with the SEC. Advisory services are only offered to clients or prospective clients where Balboa Wealth Partners and its Investment Advisor Representatives are properly licensed or exempt from registration.
