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What to Do Now: Financial Advice for Your 60s and Beyond

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Whether you’ve been on top of your finances from the beginning or you’re just now getting around to a full financial checkup, your 60s are an important time to carefully consider your financial health. Are you financially prepared for retirement? Have you created a list of potential expenses now that you’re nearing your retirement years? As you approach your 60s, make sure to add these items to your financial checklist.

Keep Paying Into Your Retirement Accounts

Ideally, you want to keep funding your retirement accounts until you are ready to retire. Qualified retirement accounts may be tax-deferred, which means that you’ll pay taxes on withdrawals. Does your employer offer matching contributions? If you don’t take full advantage of the match, you’re turning away free money. In your 50s, you’re also eligible for catch-up contributions, which can help increase your available funds in retirement.

Evaluate Your Retirement Asset Mix

Take a look at how you’ve positioned your retirement accounts. Do you have a good mix of pre- and post-tax accounts? Roth IRAs have no required annual minimum withdrawals after 70 ½ and can give you more flexibility in retirement. Depending on your current tax bracket and income level, you may want to adjust how you make your contributions, or convert some old IRA’s. As retirement nears, you should revisit your current investment allocation. While bonds generally see less growth than stocks over the long-run, they offer some stability as you start to rely more, or even entirely, on your savings.

Title Your Accounts

If something happens to you, what happens to your money? Adding a beneficiary can clear up any potential confusion. With this strategy, you can make it easier to pass your funds to heirs in the event of your death. Keep in mind, that beneficiary designations will override your will. Review them about once per year or after any major life changes like marriage, divorce, or the birth of a grandchild to make sure your money is going where you want it to.

Solidify Your Retirement Plans

What does life in retirement look like to you? Are you going to be downsizing into a smaller home or will you finally be able to move into the dream home that you’ve been thinking about for years? Will you be staying in your current city or moving to a new one, perhaps to get away from the cold or to be closer to your family?

You should also consider how you’ll be spending your money and your time: are you going to be traveling frequently? Do you have hobbies that you’d like to invest more in once you’re retired? Consider how those hobbies have the potential to impact your spending and make sure that you have adequate funds in your retirement account to handle those plans. A passive source of income through your retirement years, from rental property or royalties, for example, may make it easier to fund your plans.

Prepare for Healthcare Costs

Healthcare remains one of the biggest expenses in retirement and many seniors find themselves struggling to cover the cost of healthcare, especially if a major and ongoing health problem pops up unexpectedly. Even with Medicare, you need to be ready for these potential expenses, but it’s especially true if you’re retiring early before you’re eligible for Medicare. Make sure that your retirement planning includes a strategy for dealing with medical costs, whether that means making sure that you have secondary insurance or monitoring your retirement accounts to be sure that you’ve secured enough of a buffer to deal with unexpected medical expenses.

Do you need help with financial planning as you get closer to your retirement years? Are you struggling to decide how to invest your financial assets? Contact Sharkey, Howes & Javer today to speak with a CERTIFIED FINANCIAL PLANNER™. We’ll help you get your financial planning on track and provide you with the advice you need to meet your financial goals.

Inside the Economy: Debt & Brexit Effects

By | Economic Discussion, Economy, SH&J Blog | No Comments

On this week’s Inside the Economy with SH&J, we take a look at corporate debt issuance in 2018 versus issuance in 2006. Are corporations taking on more or less debt than they did before the Financial Crisis? We also discuss how Brexit could complicate the border between Northern Ireland and Ireland. What could be different with this border when the UK leaves the EU? Tune in to find out!

Happy Holidays from Sharkey, Howes & Javer

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Now that the post-Thanksgiving coma has faded and the year is coming to an end, the team here at Sharkey, Howes & Javer would like to be the first to wish you happy holidays.

However you celebrate, we hope you have safe travels, stay warm, and wish you peace and joy this holiday season.

Our office will be closed on December 24th and 25th for Christmas, and on December 31st and January 1st for the New Year to let our team spend time with their families. We will be back in the office on January 2nd, refreshed and renewed, to help start your new year off on the right foot.

What to Do With Your Bonus or Tax Refund

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There’s not a single person who doesn’t appreciate receiving a large sum of money, whether it is a bonus from work or a refund of taxes that have been over-paid throughout the year. However, it’s easy to have spent this large sum of money before it’s in your pocket. Most of us have felt the disappointment of not receiving expected funds. In the event you haven’t already spent the money, what do you do with it once it does actually hit your bank account?

We suggest giving yourself permission to spend a small amount, possibly 10%, on something fun or frivolous. Maybe that’s a ski pass, a vacation, new technology, or a wardrobe boost. We suggest putting the rest toward a goal that will help advance your financial picture. The first priority is likely paying down credit card debt. After this is paid off, then consider paying down a car loan, student loan, home equity line of credit, or mortgage.

Another consideration is boosting savings. Once you have 3-6 months of emergency savings in the bank, you could fund retirement with a Roth IRA contribution. If you are on track for your retirement goals, you could fund a brokerage account for mid-term goals such as buying a house or vacation home, or an HSA for future health care expenses. If you are receiving a bonus, check with your HR team to see if you can invest the funds in your company 401(k) plan to defer the taxes.

A couple secondary options to consider include:

  • Funding an account for health insurance premiums if you are planning to retire before Medicare age 65.
  • Investing in a home renovation to boost the value of your home for a future home resale.
  • You could also consider investing in residential or commercial rental real estate.
  • Pursue further education or a designation that will help you advance your career.
  • Your favorite charity or non-profit would be more than happy to receive a donation.
  • Consider an impact investing opportunity.

There are endless ways to use a large sum of money. If you have received a tax refund, talk with your CPA about adjusting your tax withholding on your W-4 to better align your tax payments throughout the year so you are not giving the IRS a tax-free loan of your hard earned income.

Please call Sharkey, Howes & Javer at 303-639-5100 to schedule a complimentary consultation to discuss your financial picture.

Custom Insurance

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Most people understand the concept of insurance. People pay a premium to an insurance company for the protection against a potentially catastrophic financial loss. Insurance companies are able to make money by pooling policyholders’ risks and charging a premium based on actuarial estimates.

The most common types of insurance policies are life insurance, disability insurance, and homeowners and auto insurance. But what happens when you want to insure something outside of the norm, say a personal item such as a laptop or expensive piece of jewelry? More and more, technology is starting to act as a disruptive force in the insurance industry that makes obtaining custom insurance more efficient for consumers.

There is a host of startup insurance firms that now allow you to quickly and easily insure single items, for varying periods of time. According to KPMG, this budding industry, nicknamed “Insurtech”, gathered over $1.7 billion from Venture Capital firms in 2016. One of the most popular companies, called Trov, is entirely app based. It got its start in Australia and the U.K., and recently made its way to the States. It can be very convenient if you want to insure an item for a specific period of time. For example, if you are going on a cross-country road trip with the family and you were worried about losing or damaging an expensive camera, all you’d have to do is send a picture of the camera to the app, tell them how long you want it insured, and you will receive a quote instantly.

Another on-demand insurance company is called Sure. It’s very similar to Trov, but you can also purchase baggage protection when traveling, rental car insurance, and insurance on your pet. As these on-demand and custom insurance companies start to mature, it will be interesting to see what other technological advancements will develop that will aim to make our lives easier as consumers.

If you would like to discuss insurance protection with a CERTIFIED FINANCIAL PLANNER™, please call Sharkey, Howes & Javer at 303-639-5100 to schedule a complimentary consultation.

Inside the Economy: Rising Interest Rates & U.S. Housing

By | Economic Discussion, Economy, SH&J Blog | No Comments

On this week’s Inside the Economy with SH&J, we discuss the effects of rising interest rates. The Fed is expected to announce another interest rate hike in mid-December. How does this effect the U.S. housing market? With market unpredictability being a media focus, we compare stock market volatility in 2018 versus historical averages. How is Europe’s economy holding up with news of Brexit and China slowing? Tune in to find out!

Happy Thanksgiving from Sharkey, Howes & Javer

By | Holidays, SH&J Blog | No Comments

Thanksgiving is upon us again! As we all take time to reflect on the things we appreciate, we would like to extend a very special thank you to each and every one of you: our wonderful clients.

Whether you’re staying close to home or leaving town for the holiday, we hope that you have a very happy Thanksgiving, surrounded by family and friends with lots of smiles, laughter, and great food to go around.

In honor of the holiday, our office will be closed on Thursday, November 22nd, and Friday, November 23rd. We’ll be hard at work for you again on Monday the 26th.

Keeping with tradition, here are some fun facts about Thanksgiving that you can share around the table this year:

  • About 46 million turkeys are cooked for Thanksgiving every year (source)
  • Thanksgiving was originally meant to be a fast, not a feast (source)
  • Only male turkeys gobble. The sound that a female turkey makes is called a cackle (source)
  • A single can of jellied cranberries contains around 200 cranberries (source)
  • If you have any last minute questions about your turkey, Butterball has your back with their Turkey Talk Line (source)
  • Thanksgiving Day football games are almost as old as Thanksgiving itself (source)

It’s Almost Open Enrollment, Should You Open an HSA?

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This year, Federal open enrollment runs from Monday, November 12, 2018 – Monday, December 10, 2018 and it may be a good time for individuals and families to review and make changes to their health insurance coverage. Even if you have been covered under an employer-sponsored plan for many years and are not planning to make any changes, this year it might be time to consider opening a health savings account, also known as an HSA. To be eligible for an HSA you cannot be enrolled in Medicare and must have a high deductible health plan. For 2018 that means you have a deductible of at least $1,350 for individuals and $2,700 for families where the maximum out of pocket cannot exceed $6,650 for single coverage and $13,300 for family coverage.

HSAs are triple tax advantaged accounts offered through employers and some banks and financial institutions as a way for individuals and families to save for health care expenses as they would save for their retirement. Contributions made to the account are tax deductible regardless of income level. If you invest the funds, any growth is tax deferred and distributions are tax-free when withdrawn for qualified health expenses. Unlike a Flexible Spending Account, you do not have to use the funds you contribute by the end of each year. The balance rolls over year by year and if you are able to cover your current medical expenses through cash flow, the funds can be maintained in the account for future needs.

The IRS adjusts contribution limits to an HSA each year and for 2018 they are set to $3,450 for individuals and $6,900 for families, with a $1,000 catch up contribution if you are 55 or older during the year. While you cannot use HSA funds to pay your health insurance premiums, you can use the funds to pay Medicare premiums once enrolled. If funds are withdrawn for non-medical expenses, there is a 20% penalty until age 65. After age 65, funds can be used for any expense but are subject to taxes if not medically related.

If you miss the November 12th to December 10th window, there is good news. HSAs are not restricted to the open enrollment period and an account can be opened at any time as long as you maintain eligible coverage. Call Sharkey, Howes & Javer at 303-639-5100 to speak with a CERTIFIED FINANCIAL PLANNER™ and determine if it makes sense for you to open your own health savings account.