finances Archives - The Inside Press

As September rolls around and school begins, no matter what age you are, it always feels like it is the beginning of a new year. It’s also a good time to review your finances and make any changes before the end of the year. Here are a few year-end things to consider:

• College Planning – Make sure to fund your 529 plan before year end. You can deduct up to $10,000 if married or $5,000 if single on your New York State tax return. Even if you will need the money to pay college tuition in January, you can fund the 529 plan, get the deduction, and then withdraw it to pay the tuition. Make sure you are funding the New York plan at NYSAVES.ORG. Go to NYSAVES.org to get started.

For those who have children in college or who will be starting college in 2019, you can complete the FAFSA forms beginning October 1st. If you looking for financial aid, schools often have limited resources so it’s best to get them done early.

• Retirement Plans – Are you fully funding your 401K, 403b and other work-related retirement plans? Review your current contributions to make sure you are getting the full benefit of the tax deduction and deferment that you can. In most cases you can fund $18,500 in 2018. If you are age 50 or older, you can add an additional $6,000 to your contributions.

• Tax Withholding – There has been much confusion regarding the new tax laws. With homeowners losing much of their property tax deductions starting this year, many may find that the lower tax rates are not having much of an impact. In fact, some taxpayers may actually have to pay more taxes than the prior year. Review your withholding and estimated taxes paid to date. If you need to make a change you can either pay an estimated tax payment or change your tax withholding. Now is a good time to review this with your accountant.

• Medicare Surcharge – If you are 65 or older and on Medicare, make sure to look at your income to see if you will be hit with higher Medicare Surcharges in the next year. IRMAA (Income Related Monthly Adjustment Amount) often is a big shock for many retirees each year. There are income limits that you should be aware of to help reduce this surcharge. Now is the time to look at your income and see how you can lessen the impact of IRMAA.

With tax deductions being reduced, now is the time to make sure you are taking full advantage of the available deductions you have. A “Back to School” review of the above areas can make sure your year-end planning goes smoothly!

By Scott Kahan

You get in your car knowing you left plenty of time to arrive at the restaurant for your eight o’clock dinner reservations. Somehow, on the way you manage to make a wrong turn and get lost. Assuming you don’t have a GPS, what do you do? The stereotypical answer, which is probably true more often than not, is that men will keep driving around hoping to find their way. Women, on the other hand, will stop and ask for directions. So when it comes to finances and financial planning, is it any different?

Financial planning is about identifying your goals and objectives. Once this is done, the next step is to come up with the “road map” of how you reach your destination. Studies have shown that women deal very differently with their financial planning than men do.

Women often face more financial challenges than men as a result of lower salaries, prolonged career breaks, and relative longevity. Women tend to have smaller pensions or 401(k) balances, on average earn less than men while working, and are more likely to have part-time jobs with limited retirement benefits. Women also leave the workforce more than men to become family caregivers, further reducing their ability to save.

Whereas men are often more confident that they will have enough retirement income to live comfortably, women tend to be less confident in their knowledge about financial products and services and that they are on the right path financially. So logically this leads women to ask additional questions with the goal to become more knowledgeable about finances.

This way, when making financial decisions, having the information allows you to be more confident in that decision. When it comes to financial planning, being more confident with your decision making process allows you to stay the course and not panic with every headline or market drop.

So the next time you are lost and need help, stop and ask questions. Of course make sure the person you are asking is knowledgeable. By doing this, you have a much better chance of reaching that goal, whatever it may be.

Scott M. Kahan, is a Certified Financial Planner® professional and President of Financial Asset Management Corporation, a fee-only wealth management firm located at 26 South Greeley Avenue in Chappaqua. Call Scott Kahan at 914-238-8900 or write to skahan@famcorporation.com.