All Posts By


Savings Rates in Colorado vs. the Nation

By | SH&J Blog, Tips | No Comments

As younger workers enter the workforce and the baby boomers make their exit, the importance of savings has reached a new generation. A common rule of thumb for those just entering the workforce is to contribute approximately 15 percent of their income to their retirement. Unfortunately, this percentage is often not met by many, especially for fresh college graduates paying down student loans.

Compounding returns can be a powerful force, but you have to start saving early and often to truly take advantage of it. For every 10 years you delay funding your retirement, it’s possible you will have to roughly double the amount you save. It’s important to make sure you’re saving enough to reach your goals.

Colorado Saving Rates

The Bureau of Economic Analysis rated Colorado at 106.41 on the Nest Egg Index, indicating that Coloradans are more capable of saving money for retirement than Americans are as a whole. However, it does not necessarily mean that they’re saving enough.

As of November 2018, the national average savings rate is 6 percent of household income. This is significantly lower than the recommended 15 percent recommended by financial planners, but the rate is still trending up since its low point of just over 2 percent in 2005.

Colorado vs. Other States

How does Colorado stand in the rankings? Nationwide, Colorado is ranked 10th on the Nest Egg Index, indicating that Coloradans have a better opportunity to save for retirement and financial success than the residents of 40 other states. New Jersey tops the list with a rating of 114.35, Oregon represents the average with a score of 100.04, and Mississippi comes in last at 85.48.

If you’d like to review your own personal saving rate, whether you’re saving for retirement or more immediate goals, get in touch with us today for a complimentary consultation with a CERTIFIED FINANCIAL PLANNER™.

Inside the Economy: Government Shutdown & Unemployment Numbers

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

On this week’s Inside the Economy with SH&J, we discuss the effects of the government shutdown on the U.S. economy. What percentage of U.S. GDP is comprised of Federal consumption and investment? The national unemployment rate remains below 4%. Tune in to find out which states have better unemployment numbers than others and where the chances of a global recession stand.

What to Expect if You Choose Early Retirement

By | SH&J Blog, Tips | No Comments

The age old question: when can I retire? As financial planners, we are often faced with the question: can I retire early? Retirement in your 50’s or early 60’s is a possibility, but there are some additional items to plan for if you are thinking about leaving the work force early. Here are a few considerations to be aware of if early retirement is in your future.

Health Insurance Costs:

Don’t take your employer-provided health care plans for granted. Typically, the biggest expense that individuals in early retirement face is health insurance premiums. While waiting to qualify for Medicare at age 65, you have a few different options. Once you leave the workforce, you have the option to sign up for COBRA benefits which provides continuing coverage of group health benefits for up to 18 months following separation of service. COBRA usually requires the former employee to pay the full premium for health coverage up to 102% of the employer plan cost. While COBRA coverage is more expensive than coverage for active employees, it can still be cheaper than insurance available through the private insurance marketplace. Getting quotes from the private insurance marketplace and under the Affordable Care Act can help you plan for healthcare expenses.

Sufficient After-Tax Savings:

The IRS makes it difficult to access money from retirement plans prior to the age of 59 ½, without facing a penalty. That is why it is important to have an adequate amount of savings held in a taxable account if you decide to retire prior to 59 ½ to avoid a hefty bill from the IRS. There is one exception that allows you to access retirement plan money early, it’s called the “Age 55 Rule”. This rule allows individuals who leave their company at age 55 or older to take penalty-free withdrawals from their 401(k). But, be careful! Once you roll the money from the 401(k) into an IRA, the rule no longer applies.

Time is Money:

For many retirees, the most difficult part of transitioning out of the work force is adapting to having an abundance of free time. It is important to financially plan for how you will fill the hours that you previously spent at work. Whether that be with expanding on hobbies, travel, or more time spent with family, it’s important to prepare for some increased spending in the first few years of retirement as you adapt to your new life. A common habit of new retirees is spending too much too soon, so it is important to monitor your spending so you can sustain your lifestyle throughout all of retirement.

A Plan for Social Security:

Before you enter into early retirement, prepare a game plan for the appropriate time to start Social Security and stick to it! It’s common for retirees to want to take Social Security as early as possible to help with cash flow, but taking the payments before full retirement age can greatly reduce your benefit over the long term.

Are you considering early retirement and need help planning for the future? Are you unsure of how much is enough for retirement? 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.

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

By | SH&J Blog, Tips | No Comments

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

By | Holidays, SH&J Blog | No Comments

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

By | SH&J Blog, Tips | No Comments

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

By | SH&J Blog, Tips | No Comments

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.