SPRING 2010
C L I E N T A DV I S O R
U.S. EDITION
A Publication of the Private Wealth Management Group
St. Louis, Missouri
TEAM GROWTH
LITTLE-KNOWN TIPS FOR COLLEGE SAVINGS
You may have noticed something different about
Private Wealth Management. I don’t mean the
newly redesigned corporate office space in St Louis.
And no, I don’t mean our national website or recent
headlines. I’m referring to the addition of Aaron
Kolkman to the Private Wealth Leadership Team.
TIP #1... Regardless of income, all families considering post-secondary education expenses should apply for
financial aid. Most institutions today use the FAFSA (Free Application for Student Financial Aid) to determine
aid eligibility. However, some use it to screen for tuition discounts called “merit money”. These discounts are
not need-based, but instead are used to lure certain types of students to the institution. In fact, most schools will
discount tuition for the kids that they really want, meaning that merit money is often awarded to children from
affluent families. Fact: the average tuition discount at private four-year colleges and universities is 33.5%, so
merit money can save families a great deal of tuition dollars. By the way, public universities use merit money as
well.
“Kolkman will play a key role in expanding the firm
in key markets nationally. We expect significant
growth over the next five years and need the right
leadership to get there,” said Joseph Altic, CFP®,
MBA, Managing Partner of the Private Wealth
Group and President of Private Wealth
Management, LLC.
Kolkman formerly managed Boulevard Private
Wealth Management of Arizona, and joined the
Private Wealth Group following its acquisition of
Boulevard in 2009. He has a B.A. from the
University of St. Thomas in Minneapolis/St. Paul,
MN, and is fully registered and licensed. Kolkman
will be a candidate for the Certified Financial Planner (CFP®) designation in November, 2010. His
experience includes asset management strategies,
benefits planning, and charitable gifting strategies.
He is a member of Trinity Lutheran Church in
Chesterfield, MO, and enjoys volunteering for
multiple local charities. Three of his favorite
pastimes are his two kids, Allison and Jackson, and
his niece Kaylee Knudson-Subialka. Aaron also
enjoys jogging and racquet sports, and is a sports car
enthusiast.
Aaron’s three guiding principles are Faith, Patience,
and Discipline.
SURPRISING NUMBERS
$750… Cost of one year’s tuition at Syracuse
University in 1964.
$47,820… Cost of one year’s tuition at Syracuse
University in 2009.
250-300… Millions of cell phones currently
being used in the US.
240,000,000… Number of jobs affected by the
world’s largest industry– tourism.
TIP #2... Understand which assets count in the financial aid formula and which don’t. All assets are not treated
equally, so its important to start planning early to qualify for some traditional, need-based aid. With the right
strategy, it is even possible to own a vacation home, have a couple million dollars in retirement accounts, and still
qualify for traditional aid. In fact, federal aid rules permit families to shield certain assets by using the Asset
Protection Allowance. This allowance depends on whether a household has one or two parents and the age of
the oldest parent, among other criteria.
TIP #3... In general, it’s also important to title assets correctly as titling determines which assets count towards
financial aid calculations. Also, different ownership counts in different proportions. Parents’ assets are counted
towards the Expected Family Contribution (EFC) at 5.64% of the actual value of the assets, while kids’
assets are included from 35 to 50% of the actual value. An important note: 529 and Coverdell assets are
considered parental assets for the purposes of financial aid.
Remember, education funding is a tricky proposition. The expense is large, the inflation is high, and the timeline
is short.
THE LONG TERM CARE DILEMMA
Long-term care (LTC) insurance is an unfamiliar and often misunderstood form of insurance. Also called extended
care, LTC insurance covers care that is needed beyond the time period covered by Medicare or major medical
insurance. LTC insurance pays health care expenses 1) when Medicare and private major medical coverage is
exhausted, or 2) for
intermediate or custodial care, which are not covered by Medicare or major medical at all.
When you consider the potential risks of not purchasing long term care insurance, the consequences could be disastrous...
According to the U.S. Department of Health and Human Services, at least 70 % of Americans over age 65 will
require some long term care services at some point in their lives. LTC insurance provider John Hancock estimates
the average current costs of nursing homes to be $185/day nationally. At that rate, a three-year stay would have an
average cost of $202,575 nationally in today’s dollars. This amount of money can take a big bite out of your
retirement if you make the decision to self insure.
As nursing home costs rise rapidly, so does the risk to your wealth...
The cost of LTC insurance is based on your current age, health status, and residential location. To cut premium
costs, purchase the coverage sooner than later, as premiums can more than double between the ages of 55 and 65.
Also, there are now different types of LTC policies available beyond the traditional “use it or lose it” policy, such as
policy benefits tied to life insurance and/or money-back guarantee programs, in which the benefits are guaranteed by
the claims paying ability and financial stability of the issuing insurance company. Carefully evaluating your options
can literally save a fortune during the golden years.
In support of this article, Private Wealth Management will coordinate a 30-minute long-term care plan
analysis with consulting fees waived. Please call (888) 878-1804 and reference “LTC Article” (valid through
June 30, 2010).
MARKET INDEX
ASSET CLASS
3 MONTHS
246… Tons is the weight of $1 million worth of
Dow Jones Industrial Average
Blue Chip Stocks
+ 4.11%
+ 42.49%
pennies (100 million pennies).
Standard & Poors 500
Large Cap Stocks
+ 5.39%
+ 49.54%
NASDAQ Composite
Small & Large Cap Stocks
+ 5.68%
+ 56.60%
1951… Year in which the first credit card was
MSCI EAFE
International Stocks
+ 0.94%
+ 54.94%
issued, released by American Express.
Barclay’s Aggregate
Fixed Income
+ 1.78%
+ 7.66%
Journal of Financial Planning Q1, 2010
12 MONTHS
Performance Data as of 03/31/2010. Past performance no guarantee of future results. Indexes are unmanaged and cannot be invested in directly.
www.us-privatewealth.com
This material is for information purposes only and is not intended to provide specific advice or recommendations for any individual. Before making any financial commitments, please consult with your financial professional.
Securities and advisory services offered through LPL Financial, Member FINRA/SIPC and a Registered Investment Advisor