Continuing in our economic discussion series, Larry Howes discusses the U.S. and Global economy. This week he shows us our first hint of the 4th Quarter U.S. GDP, shares some interesting insight into the Colorado energy industry and talks about troubles in Japan, plus much more. Just 10 minutes this week and highly educational! We would love to hear your comments and questions in the comment section below.
Planners
How much should I save for college?
Most of our clients are saving for college at some point during their time with SH&J. Some are saving for their children and others for their grandkids. As Harold highlights in the video, the number one rule when saving for college is:
Save for retirement first.
That said, when you are looking at how much you should save, consider the following factors:
- Private or public college
- In-state or out-of-state tuition
Working with a financial planner can help you look at these factors along with your retirement and other financial goals to decide on the best path for your college savings goals.
At SH&J, we usually start with 529 plans for college savings. 529 plans:
- Receive federal & state tax breaks
- Are low maintenance
- Allow you to maintain control of the funds
- Grow tax free as long as the money is used for college education
Take a look at our College Planning page for more information about 529 plans and other college saving questions.
If you are looking at saving for college soon, we’d love to meet with you to hear more about your goals. Give us a ring at 303.639.5100 and let’s set up a time.
Inside the Economy with SH&J: January 19, 2015
On Monday, January 19, we had our second economic discussion of the New Year. We covered many interesting facets of the economy including oil, global unemployment, China and more. Listen in and share with your family and friends. We would love to hear your comments and questions in the comment section below.
3 Questions to Ask When Choosing a Financial Advisor
Finances are intimately woven into our lives. Choosing a financial advisor to guide you in your financial decisions can be a stressful process, but an important one. Having the right financial advisor on your team gives you peace of mind and can put you on a good financial path.
Whether you are looking for a financial advisor for the first time or you are looking for a new advisor, here are some key questions to ask:
1. How are you compensated?
Starting with this question is key to understanding the type of financial advisor you are working with. They should be able to answer the question quickly and with specifics. Are they receiving kickbacks for recommending certain investments? Do they have sales quotas to meet? Are they paid by salary or commission? Are they recommending the same investments to all of their clients? Why or why not? A planner who is paid by commission or sales versus a salary or hourly rate could have an incentive to steer you in a specific direction.
Ask for information about all of their fees and how much you will be paying per transaction, product and service. Also, ask about any additional fees you can expect from other services they offer. If the advisor is unwilling to answer or vague in their responses, consider looking elsewhere for a financial advisor. Continue reading
Take Eileen Sharkey’s Financial Literacy Course
Each year, Eileen teaches an interesting eight part financial literacy course to groups here in Denver. The course is well attended and very informative for those who attend. We know not everyone can be there in person, but wanted all of you to have access to the wealth of information provided throughout this class, so we recently videoed the class and posted it online for viewing. Each part of the eight part series is about 45 minutes to an hour long and well worth the time.
We encourage all of our clients, their children and their friends to take the time to ‘attend’ Eileen’s class via our website. If you complete all 8 sessions, please email us to let us know so we can congratulate you with a Certificate of Completion.
Click here to be taken to the series or watch part one of the series below.
Sharkey, Howes & Javer’s Advisory Team Makes the List as 2014 Five Star Wealth Managers
(DENVER, CO) Sharkey, Howes & Javer’s team of financial advisors has been recognized as 2014 FIVE STAR Wealth Managers in the November issues of 5280 and ColoradoBiz magazines.
Eileen Sharkey, CFP®, Lawrence Howes, CFP®, Joel Javer, CFP®, Mimi Hackley, CFP®, Karlton Childress, CFP® and Harold Kirschner, CFP® of Sharkey, Howes & Javer, are among the Denver area wealth managers with at least five years of experience and no regulatory actions against them to be recognized as 2014 Five Star Wealth Managers.
There were 4,385 award candidates in the Denver area that were considered for the Five Star Wealth Manager award. Only 528 (approximately 13% of the award candidates) were named 2014 Five Star Wealth Managers. Continue reading
What do you charge for your services?
We knew we didn’t want to be bound to selling products to our clients. We wanted freedom to offer objective advice to our clients without an agenda to sell them products. Therefore SH&J was founded and still is a fee-only or non-commissioned firm.
Fee-only means our clients pay us a flat fee for our advice, not for products. We do not work on commission and are only paid by our clients. One of our founders, Larry Howes, says, “All of our efforts are designed to get you a better result.”
Melissa does a great job of giving you a quick rundown on our fees.
Here’s a quick overview of the information Melissa shared:
Financial Planning
- One-time fee depending on case complexity
- Planning fees range from $500-4,500.00
- No additional charge for planning updates
Investment Management
- 1% of assets under our management up to the first million
- Reduced rate on managed assets above $1,000,000.00
- Fees billed at 0.25% at the end of each quarter in arrears
Other small charges may include a fee for portfolio design, strategic implementation and asset transfers.
We’d love to meet you to share our firm’s philosophy with you in person. Give us a call at 303.639.5100 to set up a time to come in.
2015 Financial Check-Up
By Julie Fletcher, Certified Financial Planner™ at Sharkey, Howes & Javer
1. Even if you are “maxing out” your retirement plan contributions, is it enough?
The retirement plan contribution limits are set by IRS guidelines and reviewed each year. However, the IRS is not a personal financial advisor and does not know how much you need to be saving to meet your financial goals. Just because you are “maxing out” your plan does not necessarily mean you are saving enough.
Many people choose to contribute to the company 401(k) plan, which will allow you to contribute up to $18,000 in 2015 (with an additional $6,000 catch-up for those over age 50). A 401(k) plan allows an employee to contribute a portion of his/her salary on a pre-tax basis to a retirement savings account. Taxes are not paid until money is withdrawn from the account.
Beyond the company retirement plan, another popular choice is contributing to a Traditional or Roth IRA, which will allow you to contribute up to $5,500 (with an additional $1,000 catch-up for those over age 50). When you contribute money to a Traditional IRA, you typically are making pre-tax contributions. Taxes are not paid until money is withdrawn from the account. However, a Roth IRA is opposite. The contributions are made after-tax and the money is withdrawn tax-free from the account (both the contributions AND the growth). Warning: Contributions for both Traditional and Roth IRA’s can be limited due to your adjusted gross income. Be sure to consult your tax advisor.
If you are a business owner with no employees, you could consider contributing to a Solo (“Solo” is slang or shorthand for one-participant) Traditional 401(k) with profit-sharing provisions. Total contributions in the participants account are limited in 2015 to $53,000 (with an additional $6,000 catch-up for those over age 50).
If retirement plan contributions aren’t enough to reach your goals, you could also create a brokerage account to begin after-tax investing for retirement. There are no limitations to contributions and you could receive preferential capital-gain tax treatment. Although a brokerage account can be “ear-marked” for retirement, the account can technically be used for any purpose and does not have early withdrawal penalties. Taxes are paid “as you go” each year as reported on a 1099. Capital gains could potentially be offset by capital losses. Also, investment expenses (fees/commissions) could be deductible on your tax return.
2. Are you paying too much in taxes?
Meet with your tax advisor throughout the year to take advantage of tax strategies. Your tax advisor will help ensure you are taking the appropriate deductions for your personal and/or business tax return. A few items to review with your tax advisor throughout the year:
- Are you paying more into FICA than necessary? FICA is the payroll tax paid by both employees and employers to fund Social Security and Medicare (in 2015 the maximum amount of earnings subject to FICA is $118,500).
- Have you properly explored a home refinance option? If you are paying more than 5% in interest on your mortgage, it could be beneficial to explore ways to reduce your monthly payment dependent upon the number of years remaining on the mortgage and how long you plan to remain in the home.
- Would a year-end charitable tax deduction benefit you and/or your business? Your tax advisor will help you determine how a charitable contribution would affect your overall tax liability.
- Is your small business receiving Affordable Care Act (“ACA”) tax credits for employer-paid health insurance premiums? You can learn more about ACA at the U.S. Department of Health & Human Services website (www.hhs.gov/heathcare).
- Is there a need for new business equipment? Purchasing equipment for your business can have tax advantages if structured appropriately (Section 179 of the IRS regulations).
3. Are your hard-earned business and personal assets protected?
You have worked extremely hard to build your personal and/or business net worth. Be sure not to leave any gaps in your insurance coverage that would leave you vulnerable. Potential gaps include premature death, disability, health, liability, business, car and homeowner’s insurance. Having the proper insurance in place is essential for your protection. During your insurance coverage review, revisit the Affordable Care Act and how it will affect your individual or group health insurance in 2015.
4. Where is your investment advice coming from?
Are your friends, family, or co-workers your main source of investment advice? Are you acting on “hot stock” tips or investing in your friend’s investment real estate? Have you thoroughly researched these investment ideas to ensure you are aware of all the pros and cons? Almost every investment has risks. Remember, just because investment advice is “free” does not mean it is appropriate for your personal situation.
Cheers to you and your financial health in 2015!
To schedule a complimentary consultation with one of the Certified Financial Planner™ professionals at Sharkey, Howes & Javer, please call 303-639-5100 or visit shwj.com.
You say you work as a team, what does that mean?
When we founded our firm back in 1990, we knew our success would be based on our work as a whole, not as individual planners. When we put our minds together we are able to come up with more creative plans and specialized solutions for our clients.
As Mimi mentions in the video, our team:
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is multi-generational
Having a multi-generational team sets SH&J and our clients up for the long haul. Our collective years of experience provide a wealth of knowledge for our clients. -
has a wide array of expertise
Our team consists of planners who have extensive experience with business owners, college planning, military families, and medical professionals – just to name a few. Because we don’t all specialize in the same things, we are able to offer more to fit each of our client’s unique needs. -
works together for all of our clients
While our clients meet with their primary planner on a regular basis, behind the scenes we are all working together to provide each client with the best experience possible. We are constantly bouncing ideas off of one another and meeting in various committees to keep our client’s plans on track. -
includes a dedicated support staff
We know we are only as good as the people we surround ourselves with. We have built a phenomenal Client Service team to free up our planners to do what they do best. Our team is always available to assist with client requests and answer pressing questions.
The team model has worked extremely well for SH&J and our clients. We will continue to build our team with the brightest minds in the business to allow us to serve our clients well for years to come.
If you are interested in learning more about the team model and SH&J, give us a call at 303.639.5100 to set up a complimentary consultation.
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