The Inside Press

Magazines serving the communities of Northern Westchester

Scott Kahan

Taking the Stress out of Money Management

by

Scott M. Kahan, CFP®, hard at work. Photo by Matt Smith
Scott M. Kahan, CFP®, hard at work.
Photo by Matt Smith

As the average layperson might attest, financial planning can be quite the daunting task. You may feel so overwhelmed with all the other business associated with your child going to college, or facing that impending retirement, that perhaps you may simply forget the financial aspect until it’s too late. Maybe you fall into that group of people who are so confused by the jargon that they put it off altogether in fear of it being too complicated to handle. Or, you may be one of a few who think they’ve got it all covered with their basic number crunching and investment portfolios, but who doesn’t yet realize there’s so much more to do. Whatever your reason, financial management expert Scott M. Kahan, CFP®, wants you to rest assured that he and his staff at Financial Asset Management Corporation know exactly how to help!

Since 1986, Kahan, founder and President of FAM, has been serving the good people of Chappaqua (and some in Manhattan, where also has an office) with the time-tested belief of putting his clients’ needs first.

“Being a small firm, we get very involved with our clients’ lives [and] we take things very seriously,” he says, of FAM’s approach. “It’s a personalized service that allows us to fully understand our client’s goals and objectives. We’re here to work for the client…With us, what you see is what you get.”

And to that end, “what you see” is quite extensive. The firm offers comprehensive wealth management, including both financial planning (cash flow, saving for college, tax planning, retirement planning, and insurance review) and investment management, all with that same emphasis of valuing clients’ needs above all else. “We’re a fee-only firm [meaning we don’t generate commission; our compensation comes solely from our clients], and we act solely as fiduciaries.” Acknowledging “money can cause a lot of stress,” he adds that “our goal and role is to alleviate that stress through conversation.”

The first introductory meeting at FAM is completely free, allowing potential clients and advisors alike to gauge how they can help each other. “We describe financial planning as a road map,” Kahan explains. “If you want to [drive] from New York to California, you have to plan out your trip.” Similarly, that initial meeting with a financial advisor “will address where [a client] wants to go, what the obstacles are, and how they can successfully [evade them].”

Indeed, it’s quite the lengthy process, but that’d be the case anywhere…and there’s no question clients appreciate the one-on-one, ethical approach. “[Clients] know that if they come and work with us, they’re going to get honest answers,” Kahan continues. “We will give [them] the education they need, and provide as many resources as they need until they feel comfortable.”

For Kahan, a belief in “doing what’s in the client’s best interest” isn’t limited to his work professionally; it also holds great significance in his personal relationships with people throughout the community. “For me, it’s about also giving back,” Kahan continues. “As a Chappaqua resident for the last 22 years, [with] two kids that went through the school system and graduated from Greeley, I take a lot of pride in this community…I think it’s important to get involved and give back.”

And give back he has. In addition to his professional offerings at FAM, he previously served as Treasurer on the Board for the Horace Greeley Scholarship Fund for two terms, spanned over 11 years. (“It’s a great organization that helps make up the difference for Greeley graduates to pay for college.”) With the help of a local college financial director, Kahan also presents an annual seminar at Horace Greeley High School as part of their Financial Aid Night to help parents prepare and plan to pay for college, noting, “Besides retirement, [paying for college] is probably the biggest financial concern parents have.”

In addition to his local work, Kahan is also currently a Trustee for the Foundation for Financial Planning, a national organization which provides funding for the military and other underserved groups to receive pro bono financial planning.

Whomever he is advising, Kahan maintains that when done properly and correctly, financial planning can really work. Judging by his approach, it’s easy to see why his clients agree: “They just feel relieved, getting up and walking out knowing that a) they have someone to talk to about their financial issues and b) they know someone is going to provide objective advice and help them reach their goals.” And knowing he’s played a part in making it happen, Kahan simply couldn’t be happier.

Financial Asset Management Corporation is located at 26 S. Greeley Avenue in Chappaqua. For more information, call 914-238-8900 or visit www.famcorporation.com.

Matt Smith is a writer and regular contributor to The Inside Press. For further information or inquiry, please visit www.mattsmiththeatre.com.

Paying for College 101

by

Scott-Kahan-200x300By Scott Kahan

As a financial planner who has worked with many clients over the years figuring out how to pay for college, and as a parent who has sent two Greeley graduates to college, January 1st was never a date to look forward to. Just the uttering of the term FAFSA will send many parents into a panic.

For high school seniors who will be entering college in the fall of 2017, the quest for financial aid is beginning and FAFSA is a term you will get to know quickly.

What is the FAFSA?

The short answer is that the Free Application for Federal Student Aid forms, commonly referred to as the FAFSA, are the forms that are filed each year to be eligible for financial aid. Many parents tell me that since their child will not be eligible for aid, they don’t need to bother with the forms. Assuming that you have saved enough for college and will not need to borrow money, then you may not need to file the forms. On the other hand, if you are like many families that will either need financial aid and/or need to borrow, you will still need to file the FAFSA forms to be eligible for some of the loans offered for both parents and students.

Big Changes Coming

The main reason for the struggle each year is that when you file the forms in January, you have not even filed your tax returns, let alone received your W-2s, 1099s and other financial information needed from the prior year.

At the start of the 2017-2018 college year, the FAFSA forms can now be filed as of October 1, 2016. The good news is that since this is a transition year, you will use your 2015 financial information. For those with returning students, you will again use your 2015 financial information that you used when you filed earlier this year. If this is the first time you file the FAFSA, you should already have all the financial information you will need from 2015.

Going forward, you will use the prior year information. For example, for the 2018-2019 school year, the forms will be filed starting October 1, 2017, using 2016 information.

Get started early and don’t panic!

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.

How to Pay for College

by

IMG_4590By Scott Kahan

Paying for college can be very complicated, especially if families haven’t saved enough. With many private colleges now costing close to $60,000 per year, parents can expect to spend over $250,000 for a four year degree. State schools can cost as much as $25,000 per year, or higher for out-of-state residents. How do families pay for all this? And what if parents have more than one child? Below, Scott M. Kahan, Certified Financial Planner professional and President of Chappaqua’s Financial Asset Management Corporation, offers suggestions for getting one’s financial planning under control and making the whole college process a little less stressful.

1. Consider your family’s overall financial situation. “College is one goal among many,” Kahan emphasizes to parents. “Retirement is [also] a major goal that should not be sacrificed. You can borrow for college, but you can’t borrow for retirement.” For that purpose, he suggests maximizing your savings into work retirement plans such as 401Ks.

2. For optimum savings, choose the 529 Plan. Available in all states, these plans provide tax-free growth on the money put in, as long as it is used for college. The money can also be used for any immediate family member’s college expenses, meaning, if needed, a parent can take money from one child’s account and use it for another. There is no limit to the number of plans one can set up.

Additionally, using the NYS plan (www.nysaves.org), parents can deduct their contribution on their NYS tax returns ($10,000 max for married couples; $5,000 max for single parents). Says Kahan, “Families can always fund more, but only that amount is deductible.” He also recommends parents use the direct savings plan, rather than the advisor plan, since there are no additional costs built in. Keep in mind, too, that when applying for financial aid, some schools (not all) will not count the 529 as a child’s asset in the calculations. Finally, Kahan suggests grandparents and other family members consider funding these accounts as well, in order to maximize savings.

3. If you have home equity available, consider borrowing from that. Kahan forewarns: “How you do this is important.” With interest rates still low, he suggests refinancing your mortgage rather than taking out a home equity line of credit (HELOC). Why? “The reason is simple,” Kahan states. “A HELOC has a variable rate. When rates start rising, as they will before you know it, this rate will increase, and the college loan will become very expensive. By refinancing a mortgage and taking cash out, you can lock in today’s lower rates for the term of your mortgage. The cost to obtain a new mortgage may be higher, but in the long run, could save you money.”

4. Avoid borrowing from a 401K plan; again, keep retirement money separate from this process. “There could be some advantages to doing this,” says Kahan, “but if you leave your job with an outstanding loan, that loan then becomes taxable income and possibly subject to an additional 10% penalty.”

5. Beware the private student loans trap, as these loans have “low interest rates to start, but those rates can climb.” Also, considering that these are private loans, they do not necessarily provide the same flexibility with deferment and forgiveness of debt as some government loans.

6. Consider the Free Application for Federal Student Aid (FAFSA) for your child. These forms should be completed in January of the year the child enters college. Even if a given family may not qualify for financial aid, this plan will allow a parent or child to borrow money using loans available through the school and government programs.

7. Look into Stafford loans and Parent Plus loan options. Stafford loans are student loans that can have lower interest rates, depending upon family finances. Parent Plus loans are parent loans, which allow parents to borrow up to the full cost of education each year.

8. Seek out a Certified Financial Planner professional. He or she can help you identify your goals and figure out how to best execute your plan. “By taking into account all your goals and family finances, they can put you on the right path to meeting those goals,” Kahan explains.

Additionally, Chappaqua residents/parents can benefit from the Horace Greeley Scholarship Fund, www.HGSF.org, which provides scholarships to students based on financial need.
Rest assured that all information provided is confidential.

Each year, with the help of a local college financial director, Mr. Kahan also presents a seminar on how to prepare and plan to pay for college at Horace Greeley High School in Chappaqua. He can be reached at 914 238-8900 or email: skahan@famcorporation.com. FAM is located at 26 S. Greeley Avenue.