Colorado Financial Planning: Strategies for Every Stage of Life

Although the new year has passed, it’s still a great time to reflect on past goals and set new ones with fresh motivation to improve your financial habits. Sadly, many financial resolutions fail because they lack clear direction, a structured plan, and ongoing support. Setting goals such as “save more for retirement” or “pay off debt” may be well-intended, but without concrete steps, these resolutions often lose momentum.

To create realistic and actionable financial goals, consider these steps:

• Assess your current financial situation – Before setting new goals, review your income, expenses, debts, and savings to get a clear picture of your financial standing.
• Make goals SMART (Specific, Measurable, Achievable, Relevant, Time-Bound). Setting vague goals like “save more money” can make it hard to track progress or stay motivated. Instead, define clear targets such as "Save $5,000 for an emergency fund by December by setting aside $420 per month.” A well-defined goal provides structure, making it easier to measure progress and adjust as needed.
• Develop a step-by-step plan – Breaking large financial goals into smaller ones can help maintain motivation and track progress. For example, if your goal is to establish an estate plan, start by considering how you want your assets to be distributed. Next, identify the legacy tools that best suit your needs and outline the specific actions required to complete your plan, along with a realistic timeline for finishing it.

Creating a solid financial plan is not just about setting goals but also about having a roadmap to reach them. With the right support, you’ll gain the motivation and clarity to tackle your priorities and make real progress.

Breakwater’s Denver financial planning team can work with you to structure financial resolutions to fit your circumstances, making them more attainable and realistic.

Financial disorganization can lead to overlooked expenses, unnecessary fees, and missed opportunities. Taking the time to review financial accounts, spending habits, and investment strategies can help create a stronger financial foundation.

Steps To Organize Your Finances

Gather your financial assets and assess your spending – Begin by collecting all your financial statements, including savings accounts, brokerage accounts, retirement funds, and life insurance policies. Next, categorize your expenses into essential and non-essential items. This process will help you identify areas where you can make adjustments and improve your financial health.

Evaluate debt and interest rates – Paying off high-interest debt can free up funds for savings and investments. The debt snowball method involves paying off the smallest debts first, helping to build momentum and motivation. On the other hand, the debt avalanche method focuses on tackling debts with the highest interest rates first, reducing the total amount of interest paid over time.

Assess investment performance – Market conditions shift over time, impacting your portfolio. Reviewing risk tolerance and asset allocation keeps your investments aligned with your goals and financial situation. Diversifying across asset classes helps manage risk, and periodic rebalancing keeps your strategy consistent with your objectives.

Confirm beneficiary designations – Life events such as marriage, divorce, or the birth of children and grandchildren may require updates to your estate plan. Having both primary and contingent beneficiaries adds an extra layer of protection for your assets. If the primary beneficiary is unable to inherit, a contingent beneficiary allows for asset distribution according to your wishes, helping to prevent legal issues or disputes.

Proper financial organization is key to preventing minor inefficiencies from snowballing into long-term setbacks. Breakwater’s wealth management advisors in Denver are here to help you evaluate your situation and create strategies that position you for further success.

Colorado residents have unique tax considerations, including a flat state income tax rate of 4.0% in 2025 and various deductions and credits that can enhance tax efficiency.

Key Tax Strategies

Leverage tax-advantaged retirement accounts – Contributing to employer-sponsored plans like 401(k)s, 403(b)s, and 457 plans can lower taxable income while growing retirement savings. In 2025, 401(k) and 403(b) contribution limits are $23,500, with an additional $7,500 catch-up contribution for those 50 and older. Traditional IRA contributions may also be tax-deductible, subject to income limits and employer plan participation. Self-employed individuals should consider SEP IRAs, SIMPLE IRAs, or Solo 401(k)s, which have higher contribution limits.

Utilize Colorado-specific tax credits – The Senior Property Tax Exemption provides tax relief by reducing property taxes on the first $200,000 of a home’s value for qualifying homeowners aged 65 and older who have owned and lived in the property for at least 10 years. Additional credits, such as those for renewable energy installations, can further lower tax liability.

Maximize deductions—Common deductions include mortgage interest, charitable contributions, and state and local taxes (SALT), which are capped at $10,000 annually for federal tax purposes. Certain medical and education-related expenses may also qualify for deductions, depending on adjusted gross income (AGI) thresholds.

Tax-efficient investing – Investments like tax-free municipal bonds and muni money markets generate tax-exempt interest, making them a potential tool for reducing tax liability. Additionally, managed funds with low turnover can help minimize capital gains distributions.

Tax-loss harvesting – Selling underperforming investments in taxable brokerage accounts at a loss can offset capital gains taxes, helping to manage taxable income. Be mindful of the wash sale rule to avoid disqualifications, and note that losses exceeding $3,000 can be carried forward to future tax years.

Understanding state and federal tax laws can create opportunities to maximize savings. Breakwater’s fee-only financial planner in Denver specializes in guiding clients through Colorado’s tax laws and building financial plans with tax-efficient strategies.

Money is often a major source of stress in relationships; however, when partners work together on financial planning, it can not only strengthen their finances but also deepen their bond. Managing finances as a couple works best with open conversations, mutual respect, and a focus on shared priorities.

Common Financial Challenges for Couples

• Different spending and saving habits – One partner may be a saver, while the other is a spender. Recognizing these differences is key to finding balance.
• Debt obligations – If one or both partners carry significant debt, creating a structured repayment plan can help ease financial stress.
• Long-term planning – Couples may have different visions for retirement, homeownership, or career paths, making it essential to have constructive discussions about future goals.

Steps To Build a Strong Financial Foundation

• Schedule regular financial check-ins – Setting aside time to review budgets, financial objectives, and upcoming expenses can prevent surprises and miscommunications.
• Develop a joint budget – Even if partners keep separate accounts, a shared plan for covering expenses and saving toward goals is vital.
• Plan for the future together – Retirement planning, estate planning, and major financial milestones should be discussed to match expectations.

Couples don’t need to agree on every financial decision, but having a realistic plan in place helps reduce uncertainty. Breakwater’s Denver financial advisor can work with you as a couple to develop solutions customized to your goals and aspirations.

College costs continue to rise, and balancing education savings with other financial obligations is challenging for many parents. This is why planning as early as possible helps reduce financial strain, making strategic college preparation crucial.

Key Considerations for College Planning

• The cost of attendance – Tuition, housing, books, and fees all contribute to the total cost of a degree. In-state tuition can be significantly more affordable than out-of-state options.
• Financial aid and scholarships – Completing the FAFSA is essential for accessing federal grants, work-study programs, and loans. Private scholarships can also reduce out-of-pocket expenses.
• 529 College Savings Plans – Colorado’s CollegeInvest 529 Plan provides tax advantages, allowing savings to grow tax-free when used for education expenses. Contributions are fully deductible from state income tax, with limits of $25,400 for single filers and $38,100 for joint filers in 2025.
• Coverdell Education Savings Accounts (ESAs) – These accounts allow tax-free withdrawals for education expenses but have a $2,000 annual contribution limit per beneficiary. Eligibility is income-based, with phaseouts starting at $95,000 for single filers and $190,000 for joint filers.

Breakwater’s financial planning team in Denver assists families in creating education savings plans while maintaining focus on broader financial objectives.

Rising interest rates have a broad impact on financial markets and personal financial planning. Increased borrowing costs, heightened market volatility, and shifts in fixed-income yields can significantly shape how one approaches retirement planning.

How Rising Interest Rates Affect Retirement Planning

Stock markets can become more volatile when interest rates rise, affecting portfolio performance. Bonds may lose value in rising interest rate environments, but newly issued ones offer higher yields. Retirees who depend on fixed-income investments, such as CDs or Treasury bonds, might benefit from improved returns. However, fixed-income portfolios holding long-term bonds could experience a decline in value.

Higher mortgage rates can impact home values and affordability for those downsizing in retirement. Homeowners with variable-rate loans may face higher payments, so it’s important to reassess debt.

Considerations for Fixed-Income Investments

Laddering strategies: Staggering bond maturities allow you to benefit from rising interest rates while maintaining liquidity.

Risk awareness: Pursuing higher yields by investing in riskier fixed-income securities can lead to unnecessary risks. It's critical to evaluate their credit ranking and diversify your portfolio.

Explore alternative investments: Assets like commodities, private equity, and hedge funds offer additional diversification and can help reduce exposure to interest rate volatility.

Stress-test your plan: Simulate how your portfolio might perform across different economic scenarios to uncover potential risks and strengthen your strategy.

A comprehensive retirement plan should factor in interest rate movements to mitigate risk exposure. Breakwater’s retirement planning team in Denver is highly experienced in analyzing various economic conditions and providing income strategies that support financial stability.

Breakwater Capital Group is a fee-only fiduciary firm with an office in Denver, CO, serving clients nationwide. We also offer Greater Boston, MA, wealth management and financial planning in Paramus, NJ. With over 50 years of combined experience, our team is dedicated to helping individuals and families manage their wealth with clarity and confidence.

At Breakwater, client service is a top priority—you should never feel like you're just another number or an inconvenience.

What You Won’t Experience

• High-pressure sales tactics pushing financial products
• Hidden fees or costs that aren’t fully disclosed
• Advisors who disappear when markets fluctuate
• Confusing jargon that leaves you uncertain about your financial plan

What You Will Experience

• A fiduciary team offering guidance tailored to your unique financial situation
• Clear, actionable advice without unnecessary complexity
• Direct access to your advisor when you need insight or support
• A transparent, client-first relationship built on trust
• Consistent communication to keep you informed and on track
• 24/7 digital access to your investments and financial plan

No matter your stage of life, Breakwater’s team can develop a strategy that supports your financial goals.

Contact us today to start building a plan that fits your needs.