BY SCOTT M. KAHAN CFP®
- Join your company’s retirement plan and try to contribute as much as you can. Make sure you are contributing enough funds to get the maximum matching contribution from your employer.
- One of the greatest gifts you can give is to help pay the education costs for your grandchildren. Any gifts, regardless of how large, made to anyone for the purpose of funding education, do not incur gift taxes as long as the payment is made directly to the educational institution.
- Update your estate planning documents. Protect your health and your wealth with a health care proxy and durable power of attorney. Make sure your will and trusts leave money to the correct people.
- Maximize your tax deductions. Donate items you don’t need to charity. If you expect a large income tax refund, change your withholding tax so you get more per month in your paycheck and less of a refund.
- Buying low and selling high is a lot easier said than done. Have a solid rebalancing strategy in place that helps take the emotions out of investing.
- A shorter mortgage isn’t always better. Consider taking a long-term mortgage, and then make additional payments when you can. If things become financially “tight,” you can stop making additional payments.
- Protect tangible assets with the right amount of homeowners, automobile and liability insurance for liability and disasters.
- Withdrawing retirement plan assets before age 59½ may lead to a 10% penalty; not withdrawing enough after age 70½ may lead to a 50% penalty. Moral of the story? Know when to make withdrawals.
- Pay yourself first. As you set your budget each month, set aside money for savings and fixed expenses first. What’s left over can be used for other purposes.
- Like regular checkups with your physician, regular reviews with a Certified Financial Planner professional are important to your financial “health.”
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.