SH&J News

Julie Fletcher Featured in Denver Post: Why Americans are scared of financial advisors

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Julie FletcherMeet_Julie, CFP® at Sharkey, Howes & Javer wrote an article that was featured in the Denver Post this week. Below is a small excerpt from her piece as well as a link to read the full article.

Why Americans are scared of financial advisors
We can blame the movies, and our “money taboo” society

Since the 1980’s, Hollywood has made millions of dollars creating a slew of movies depicting the greed and crime of the financial services industry. Which is your favorite? “Wall Street,” the “greed is good” movie from 1987? “Boiler Room,” “The Wolf of Wall Street” or “The Big Short”? Based on the media’s portrayal of “financial professionals,” it is no wonder that Americans are scared to death to trust anyone with their hard-earned money. Based on these movies, I would guess that a person who has never met with a financial advisor likely envisions it would go something like this:

As a frightened receptionist walks me through their chaotic cubicle hell, red-faced frenzied suits scream “SELL, SELL NOW!!” into their phones. When we finally reach the conference room, the theme song from “Jaws” runs through my mind as a cigar smoking man wearing a red bow tie slowly turns in his chair to face me. He puffs out smoke as his smile creeps into a wide Cheshire cat grin. “Welcome. Please have a seat. Did you bring all your account statements?” As I cautiously hand my private and personal information to a complete stranger, his grin turns into a frown. “Did you not read our website? I hardly think $150,000 meets our $50 million minimums.”

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Retirement Savings 101: 401(k)s, IRAs, Roths, Oh my!

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Retirement golden eggs on dollars, IRA in focus, 401k blurryOver the past two weeks we have compared Traditional IRAs to Roth IRAs and 401(k)s to Roth 401(k)s. Today we wrap up the series with a recap comparison to help guide you through the various ways to save for your retirement.

Traditional IRA

Established by: Individual
Contribution Limits: Up to $5,500 per year age 49 or below / $6,500 per year age 50 and above (limits adjusted annually)
Contributions: Pre-tax (unless non-deductible, then post-tax)
Matching Contributions: None
Distributions: Taxable and a 10% penalty unless 59 ½ or older (exceptions may apply)
Forced Distributions: Must start withdrawing funds at age 70 ½
Conversions/Rollovers: Can be converted to Roth IRA. Taxes paid during year of conversion. Deductible contributions can be rolled into a 401(k) if allowed by 401(k) plan.

Roth IRA

Established by: Individual
Contribution Limits: Up to $5,500 per year age 49 or below / $6,500 per year age 50 and above (limits adjusted annually)
Contributions: Post-tax
Matching Contributions: None
Distributions: Contributions may always be withdrawn tax and penalty free. Earnings prior to age 59 ½ are taxable and assessed a 10% penalty. Earnings after 59 ½ are tax-free unless the Roth IRA has been open less than 5 years in which case they are taxable and assessed a 10% penalty. (exceptions may apply)
Forced Distributions: None
Conversions/Rollovers: None

Traditional 401(k)

Established by: Employer
Contribution Limits: Employee may contribute up to $18,000 per year age 49 or below / $24,000 per year age 50 and above (limits adjusted annually)
Contributions: Pre-tax
Matching Contributions: Employer’s discretion
Distributions: Taxable and a 10% penalty unless
· If separated from service after age 55 or
· age 59 ½ or older (exceptions may apply)
Forced Distributions: Must start withdrawing funds at age 70 ½ unless still employed and not a 5% owner
Conversions/Rollovers: Upon termination of employment may
· Rollover to an IRA – not currently taxable
· Rollover to 401(k) if allowed by new employer – not currently taxable
· Convert to a Roth IRA – taxable event
· Distributed directly to owner – taxable event.

Roth 401(k)

Established by: Employer
Contribution Limits: Employee may contribute up to $18,000 per year age 49 or below / $24,000 per year age 50 and above (limits adjusted annually)
Contributions: Post-tax
Matching Contributions: Employer’s discretion (employer contributions are pre-tax dollars)
Distributions: Tax-free, but a 10% penalty plus taxes on earnings unless
· If separated from service after age 55 or
· age 59 ½ or older and the account has been open for at least 5 years (exceptions may apply)
Forced Distributions: Must start withdrawing funds at age 70 ½ unless still employed and not a 5% owner.
Conversions/Rollovers: Upon termination of employment may
· Rollover to a Roth IRA
· Rollover to a Roth 401(k) if allowed by new employer.

Which retirement savings account is right for you? For some, a 401(k) plus a Roth IRA may be the way to go. For others it might be a traditional IRA with a 401(k). Retirement saving decisions are as unique as you are.

As with any big financial decision, we recommend talking to a professional. Financial planners can help guide you to the best decision for your retirement and create a custom plan tailored to your individual goals.

If you are interested in a complimentary consultation, give us a call today at 303.639.5100 or visit shwj.com.

*Research for this post done on IRS.gov

Making Sense of the Social Security Kill Bill

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Retirement Concept Social Security BenefitsEarly this November, Congress surprised many when they introduced the Bipartisan Budget Act of 2015 causing Financial Advisors to revisit ways to maximize cumulative Social Security benefits for their clients. With the passing of this budget deal, we see the end to two Social Security claiming strategies that have benefited many individuals – File and Suspend and the Restricted Application.

The new rules for File and Suspend will take effect with all applications filed after April 30, 2016. We will see the end of filing a Restricted Application for anyone who is turning 62 after December 31, 2015. This leaves a 6 month window for clients to review their situation with their financial advisor to determine how the changes will affect them, and if they can still take advantage of these strategies before they go away.

The File and Suspend strategy was commonly used by married couples to allow one spouse to begin collecting their spousal benefit at full retirement age while allowing the higher earning spouse to delay and then maximize their own benefit at age 70. Under the new rules, any suspension application filed after April 30, 2016 will also suspend all dependent and/or spousal benefits that would have been paid off of the suspended record. In other words, a worker must now collect their own benefit in order to trigger benefits for their spouse or dependents.

Restricted Applications for spousal benefits were often filed by couples who both wanted to delay collecting their own benefits while taking advantage of a spousal benefit in the meantime. The new rules now state that anyone turning 62 in 2016 or later will no longer be eligible to file a restricted application when they reach full retirement age. Individuals who will be 62 by the end of 2015 will remain eligible to file a restricted application when full retirement age is attained. The caveat – if this strategy depends on one spouse filing and suspending after April 30, 2016, the strategy will not work and further planning with your advisor may be beneficial.

For Example: Mark and Mary are both 63 and remain eligible to file a restricted application for spousal benefits at full retirement age. Mark wants to delay collecting his benefits until age 70. However, he will turn 66 after April 30, 2016 at which point the option to file and suspend is no longer available and spousal benefits will no longer be paid off a suspended benefit. Mark will either have to take his own benefit at age 66 to give Mary the option to file a restricted application for spousal benefits, or Mary will have to forego her spousal benefit allowing Mark to delay his own benefit and vice versa.

Individuals fortunate enough to have already implemented these strategies will not see a change to their current benefits. On the other hand, individuals born after 1953 will be unable to take advantage of either claiming strategy and are encouraged along with anyone who will be 62 by the end of 2015 or 66 before April 30, 2016 to meet with their financial advisor to determine the most optimal claiming strategy before the window closes.

Source: Savvy Social Security Planning for Boomers, Social Security ‘Loopholes’ Closing

Happy Thanksgiving from Sharkey, Howes and Javer

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Thanksgiving Autumn Fall background with red, brown and yellow leaves and pumpkin

At Thanksgiving we take time to reflect on how thankful we are for you — our clients. We hope you have a wonderful Thanksgiving surrounded by loved ones. We will be closed on Thursday, November 26th and Friday, November 27th to allow our team to celebrate the holiday.


In the spirit of the season, enjoy this excerpt from the poem “The Pumpkin” by John Greenleaf Whittier. Read the full poem here 


Ah! on Thanksgiving day, when from East and from West,

From North and from South comes the pilgrim and guest;

When the gray-haired New Englander sees round his board

The old broken links of affection restored,

When the care-wearied man seeks his mother once more,

And the worn matron smiles where the girl smiled before,

What moistens the lip and what brightens the eye?

What calls back the past, like the rich Pumpkin pie?

 

Happy Thanksgiving!

An Evening of Entertainment with Sharkey, Howes & Javer

sharkeyhowesandjaver Eileen Sharkey, Joel Javer, Larry Howes, SH&J News, SH&J Team , , ,

On October 22, 2015, we held our annual client appreciation event. This year’s festivities were a little different than our previous events, as Sharkey, Howes & Javer was celebrating its 25th Anniversary. Rather than hosting our usual educational seminar, we hosted “An Evening of Entertainment” to celebrate twenty five successful years with the people who made it all possible, our clients.

The celebration took place at the beautiful Seawell Grand Ballroom within the Denver Center for the Performing Arts complex with approximately 380 of our clients in attendance. With lighting and drapery filling the ballroom, the ambiance set a festive mood for everyone.

The evening began with a cocktail hour, which included appetizers, drinks, and a magician who left guests in wonderment as to how he performed such tricks as turning dollar bills into one hundred dollar bills…If only we all knew his secret!

Following the cocktail hour, Eileen Sharkey presented a series of heartfelt speeches honoring our clients, staff, and her partners of 25 years, Joel Javer and Larry Howes.

Guests enjoyed a delicious dinner, and watched musical performances that took them on a journey through the years of Broadway. Acts included West Side Story, Grease, Chicago, Jersey Boys, and Rock of Ages.

The evening was a very special night for not only the clients in attendance, but for the partners and employees of Sharkey, Howes & Javer as we celebrated this important milestone.

On behalf of the entire team at SH&J, we want to thank each and every client for your continued trust and loyalty. We owe these past 25 years to you, and we look forward to the next 25 with you!

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A Special Gift for a Special Client

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Screen Shot 2015-05-20 at 4.44.22 PMNot too long ago, one of our clients became extremely ill. At that time we sent her some unique chocolates from a local Chocolate company called Wild Women Truffles. We remembered this particular client enjoyed the chocolates very much, so a few days ago, when we were notified the client had become terminally ill, we called up Wild Women Truffles.

While this company is known for its catering at special events and can also be found at a variety of retailers, Wild Women Truffles doesn’t usually deliver chocolates to individuals. Yet, when we explained the situation of our client to them they made a special exception and, instead of accepting payment from us, offered the chocolate as a gift.

It is gestures like this that really touch us. Thank you to the staff at Wild Women Truffles for partnering with us to help make a difference.

2015 Medical Advocacy Client Event

Image sharkeyhowesandjaver Medical Advocacy, SH&J Events, Tips, Videos

On April 9, 2015, we hosted our second client event at The Cable Center, located on the University of Denver’s beautiful campus. As usual, our team selected a delicious array of drinks and appetizers for our attendees to enjoy before the presentation. Some of the favorites included spiced flank steak, Chile rubbed chicken skewers and apple crisp for dessert.

The topic of the evening was Medical Advocacy. As healthcare continues to change, having a partner to advocate for your care and the care of your loved ones is more important than ever. Our own Eileen Sharkey, CFP®, along with Janine Guillen, JD, MBA, LLM, RN from Anderson & Jahde, PC Law Offices gave a very detailed presentation full of tools and tips for effective medical advocacy. For those who were unable to attend, please find a video of Eileen and Janine’s presentation below.

Note: This is a large video file and may take a moment to load.

Throughout the video, you will hear Eileen refer to handouts which are available for download on our website here. If you would like a courtesy copy of the Medical Advocacy Starter Kit 101, please contact SH&J at 303.639.5100 or email Brittany with your name and address, and a copy will be mailed to you.

Thank you to everyone who was able to join us at The Cable Center. The evening was enjoyable for all of us at SH&J and we look forward to celebrating with everyone again at our 25th Anniversary and Client Appreciation Event on October 22, 2015.

Medical Advocacy Program – Starter Kit 101
Provided with permission from the author:
Janine A. Guillen 
Anderson & Jahde, PC
5554 S. Prince St., #200
Littleton, CO 80120
303-782-0062
http://www.andersonjahde.com

2015 Q1 Quarterly Commentary

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“March Madness isn’t just for basketball anymore”

We experienced lots of thrilling and unnerving action both up and down the court in the markets. At year-end 2014, the S&P 500 was the All-star and International positions were the under achievers. The opposite proved true in the first quarter of 2015. The chart below captures the S&P 500’s volatility during various periods as it rotated between winning and losing for an overall quarterly return that was just under 1%. Lots of action – not much traction!

Screen Shot 2015-04-13 at 11.18.43 AM

Uncertainty around the interest rate policy of the Federal Reserve has contributed much to the volatility. Fed Chair Janet Yellen’s last statement announced, unhelpfully, that the Fed is “data dependent” and the pace of interest rate increases could “speed up, slow down, pause, or reverse.” The main driver of the stock market is always corporate earnings, rather than political or media pronouncements. The strengthening U.S. dollar hurt U.S. companies’ foreign earnings, which were down 5.3% in the 4th quarter 2014. A strong dollar makes U.S. purchases abroad cheaper and foreign purchases of U.S. products more expensive. Most of the companies in the S&P 500 receive at least 50% of their earnings from abroad.

The current volatility brings back memories of how terrified Americans were in 2008 when the S&P dropped 37%. It is a test of resolve to follow Warren Buffet’s advice to “buy when others are fearful” – a methodology that works! Yes, such opportunities are fearfully predicted and always unpleasant, but in retrospect every market correction stabilizes over time.

It begs the question: if downturns produce great buying opportunities, why are we afraid of the next one? Having well balanced portfolios and enough cash for current needs, allows us to stay the course during market corrections knowing that the investments will support your spending needs for many years beyond today’s headlines.

Our technical indicators are showing weakness in the emerging markets asset class, so we will immediately reduce those respective allocations by up to 25%.

The chart below reflects the performance of various indices over the past quarter.Screen Shot 2015-04-13 at 11.20.14 AM

The chart shows that even in a poor quarter for the S&P 500 other categories mostly did well – a March “win” for asset allocation and proper diversification.

 

SH&J Happenings

On our website (shwj.com) every other Thursday we post our most recent economic discussion from our Investment Committee meeting. Just click on “Blog” in the upper right hand corner to listen in.

Our offices will be CLOSED Monday, May 25th for Memorial Day and Friday, July 3rd for the July 4th holiday.

We will continue our tradition of closing our office at 1pm each Friday from Memorial Day to Labor Day so our hardworking staff can take advantage of the lovely Colorado summer! Of course we will be available if you need us, yet we would appreciate your calls on Friday mornings if possible.

The SH&J Team

2014 Q4 Quarterly Commentary

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In our quarterly reports to clients, we always include commentary on the markets, economy and other financially relevant information. Our 2014 Q4 reports recently went out, and we wanted to share our commentary with you as well. We would also love to hear your questions and comments in the comments section below.

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New Year’s Resolution – “Do More of What Makes You Happy”

We think that would be a good resolution.  However, focusing on the financial markets around the world will rarely help!  The Media elicits emotions that cause lots of dissatisfaction and fear.

In 2014, for example, few categories did as well as big blue chip American companies.  The S&P 500 index did great, so now the news is full of advice about how you “should” have invested!  Of course with us, you DID invest in the S&P 500 – and your diversified portfolio also invested in bonds and other assets worldwide.  Remember 1987, 2000, and 2008 when the S&P 500 was, as the pundits later agreed, the one place to avoid investing in – EVER AGAIN! (Source)

Our society seems to love being unhappy about markets!  “Are they going to correct?”  Yes – we just don’t know which ones, when, and how badly.  “Did we miss out on the ‘best performance of the year/decade/century?”  “Which asset class was the one we should have exclusively chosen?”

If you had thought that the S&P 500 was the best place to be in 2014, think again.  The top performing market of 2014 was China (up 44%)!  Who would have guessed?!

We saw a fascinating report from the Medical Media about that other perennial New Year’s resolution – wanting to lose weight.  There exist as many, if not more, diets as there are sure fire ways to “beat the market”.  The American Medical Association threw up its hands and opined that although all diets may work, the only one certain to do so is “the one the patient will stick with!”  We think that makes a lot of sense, and we try hard to design investment portfolios that “the client can stick with.”

2015 will probably be the year the Federal Reserve raises interest rates – very carefully (Source).  We expect that our US bonds and stocks will weather the change well, despite turbulence and dire headlines.

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Sharkey, Howes & Javer’s Advisory Team Makes the List as 2014 Five Star Wealth Managers

sharkeyhowesandjaver Eileen Sharkey, Harold Kirschner, Joel Javer, Karlton Childress, Larry Howes, Mimi Hackley, Planners, SH&J News, SH&J Team

SHJ_5_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 →