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Axiom | Vol 258

Client Axiom | Vol 258

Train Your Brain, Train Your Game | High Prices & Low Supply May Be Cooling Housing Boom

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Meet The Axiom®’s Guest Editor: Patricia Tobin, CFP®

Hello! My name is Patty Tobin. I am one of the Wealth Managers at Annex.

We work with clients in an attempt to provide a sense of confidence (and relief!) that many aspects of planning are in order or being addressed. This includes financial planning and investments, estate planning, tax strategies and more. The team at Annex works in the best interest of our clients every day. It’s so rewarding!

I’m a proud graduate of UW-Madison and enjoy Badger football, biking and spending time at our family cottage.

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As Economy Continues To Grow, Can The Fed Continue Quantitative Easing?

As earnings reports continue to demonstrate health and the housing market shows continued growth, how long will the Fed continue quantitative easing? Annex Wealth Management’s Dave Spano and Derek Felske discuss.

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Client Exclusive: Train Your Brain, Train Your Game

6 tips to help improve your golf game both mentally and physically.

Golf.

As a player, the palms of your hands might start to sweat, and your heart starts to race just thinking about the game. Isn’t golf supposed to be a relaxing sport?

Isn’t it the kind where you get a group of friends together to shoot the breeze and play a round? The idea always seems to be better than reality. Whether you want to admit it or not, there are few people out there that play golf just for fun. And if you’re honest, chances are that you aren’t one of them.

Golf can be fun and relaxing, but it also requires discipline, concentration, and practice. One small move can mean the difference between a shot down the middle of the fairway and spending the next hour rummaging through the bushes trying to find your lucky ball.

Now, you can spend hours at the driving range, dig up your back yard to create a putting green complete with all the curves and slopes of a traditional course, or even spend all your free time with your clubs, but there are a few important things that we have to remember as both golf enthusiasts and human beings.

We aren’t perfect. Conditions change. Not every course is the same. And really, at the end of the day, the reason to be out on the course is simply that: to be out on the course.

When you look back on all of the golf you’ve played in the past year or two, which hopefully has been a lot since it is a great outdoor, socially distanced activity, it’s unlikely you remember each shot you lifted your head on, or chipped too far to the left. It was more about the feeling of enjoyment; the feeling of being out there with your buddies, or maybe even more enjoyable, being out there in the peace and quiet.

Yes, that all sounds great, but it’s likely that even if you are on the course just to play, you’re still looking for ways to improve your game. As they say in golf, you never see a perfect shot (because, you know, you’re supposed to keep your head down when you swing) so we’ve done some research for you and found a few popular tips to consider to help your game both mentally and physically.

Your Brain

1. From Tee to Hole and Everything In Between

The time it takes to walk or drive from shot to shot can be used to your advantage. Your mind is as much engaged as your body while you play, so allow yourself a break in concentrating on your game. Reset your mind by thinking about something you enjoy: your kids, the nice day, your next vacation, or whatever it is that will give your mind a break from your game briefly and to release any stress that may have been building during the last hole.1 As you approach your next shot, focus in again and when you step up to the ball, your mind will be ready too.

2. Manage Your Expectations

Try playing a round where your score is not your main goal. It sounds unconventional, but this may help to ease any performance anxiety or stress that creates pressure2. When you feel pressure, each shot becomes focused on the outcome, rather than on process of hitting the ball the best way you can. Limiting anxiety can open your mind to focus on the fundamentals rather than worrying about your overall score.

3. Practice Makes…Better

Putting can be a frustrating part of the game. To combat the negative thoughts around this part of the game, try dedicating some time to some various putting drills to gain confidence in reading the green, taking shots from different distances, and getting more comfortable with how to direct your body and club to give you a solid and well-aimed stance3. Practice does not make perfect, but it can make you feel more comfortable as you near the hole. From swing lengths to different grips, there are many tips out there, but one thing remains consistent: practice, practice, practice.

Your Game

4. Imagine Hitting a Second Ball for Power

To practice more power in your shots, imagine that there is another ball sitting out in front of the one you intend to hit, as you swing through, imagine your club extending out to also hit the second ball4. This visualization helps you to avoid pulling up short by extending the length of your swing even after you hit the ball, giving the ball more distance and power.

5. Visualize to Keep Your Hands Low

Rather than continue to purchase the latest and greatest in club technology when you want more power and drive in your swing, try keeping your hands low on the club and as you swing through5. This helps to limit flight trajectory of the ball. Adjust your hands until you feel that the club will hit the turf as you swing and visualize digging your club into the turf when you hit the ball to make solid contact.

6. Don’t Pitch your Wedge

Stay calm. These shots are mentioned often enough in lists for improving your game to see that they are difficult for most. First of all, it’s important to try and not throw your club out of frustration when these shots go south. Second, take time to check that the face is open before you begin your downswing. Dial in the positioning of your hands on the grip, the angle of your wrists, and your specific stance and follow through to allow for the face to be open during the backswing and also through the downswing as you hit the ball. Keeping an open face is important and will give the ball more lift without feeling the need to add power, which will ultimately make for inconsistent wedge shots in your game6.

We hope that with just a few tips to think about, your heart rate will come down and you can relax as you lace up your golf shoes and head out on to the course.

We want you to enjoy the things you love, and we also want you to succeed. We could also go on and on, but after all this talk about golf, we’re ready to get out there and try some of these tips ourselves!

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Poll Recap: How Often Do You Read The Axiom®? Which Section Is Your Favorite?

We asked for feedback on the Axiom®, and here’s what clients had to say:

Out of those who responded, almost all of our readers check out the Axiom® every week. That’s what we like to hear! We enjoy being able to bring new content to you every single week and are happy that you like that too.

We also asked which sections you like to read or listen to the most, and we were not surprised when Week in Review was listed as number one! Our team always does a great job in summarizing the market week and we agree that it’s a great way to get a recap from our experts.

Finally, we asked what you would do if you had control of the Axiom®, and we got some great ideas! Since we write the Axiom® just for you, our clients, we want to make sure that you have a voice. Check back every week as we continue to bring you the Axiom® and content that is relevant to you!

Thank you to those who took the time to fill out the poll and give us some feedback!

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If You’re Looking To Find A More Tax-Friendly State, Consider These Key Factors

With the 2017 federal tax law in effect, there has been a lot of talk about the change in the SALT (state and local tax) deduction, a deduction we receive for state income taxes and property taxes paid. 

SALT deductions continue to be limited to $10,000 per return in 2021, and are slated to remain capped through 2025, which means many people may not be getting the same tax benefit for state income taxes paid. Moving to a no- or low- income tax state during retirement may be more appealing. Nine states do not have an income tax: 

  • Alaska 
  • Florida 
  • Nevada 
  • New Hampshire 
  • South Dakota 
  • Tennessee 
  • Texas 
  • Washington 
  • Wyoming

Consider What It Takes To Leave 

Before you make the switch to leave your home state, be aware of what the state uses to determine your legal residence for income tax purposes. The Wisconsin’s Legal Residence Questionnaire asks questions such as did you change your driver’s licenses, where you vote, where your car is insured, and what your future intents are. Wisconsin typically requests the form with your tax return in the year you change your residency. 

Consider What It Takes To Establish Residency 

Depending on what state you move to they may have their own requirement on what you need to file/do to establish residency. For instance, in Florida you’re able to file a Declaration of Domicile, affirmatively establishing your intent to be a Florida domiciliary going forward. Unfortunately, establishing domicile isn’t as easy as completing a form. Please see your advisor for a comprehensive list of action items for establishing domicile in your target state. 

Consider If You’ll Be Paying Partial-Year State Taxes 

If you’re deducting expenses on your federal tax return at tax time, keep in mind that you may have to file two separate state tax returns when you move out of state. If you earned income in two different states during the fiscal year — unless you’re moving to or from a state that does not collect individual income taxes, you’ll need to file a return in each state to cover the time you lived there. 

Consider Changes To Insurance 

If you’re changing jobs, consider your individual or new employer-sponsored insurance options, like life, health and disability insurance. Ask your private insurance provider about coverage for your cars, any items you have in storage, and your residence to make sure you’re covered during your move. 

Talk with your financial advisor about any insurance policies you have to see if they still apply to your change in circumstances. Sometimes, more or less insurance is necessary when you move someplace new. 

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“The Ask Annex segment provides great questions from our readers with responses from our team of experts. There is always something to learn.”

– Guest Editor: Patricia Tobin, CFP® | Wealth Manager

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This week’s Ask Annex comes from Dale, who asks:

“Do you think the RMD for IRA’s might be suspended again in 2021?”

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We asked Annex Wealth Management’s Eric Strom, CFP®:

As you know, the CARES Act of 2020 temporarily waived required minimum distributions (RMDs) from traditional IRAs, inherited IRAs and employer plans. An RMD is the amount of money that must be withdrawn each year from such accounts once you reach a certain age, typically in your 70’s. 

So far, additional RMD relief in 2021 is not looking likely. There have been a variety of tax law changes proposed this year, and additional RMD relief has generally not been included in the proposals. 

Some experts believe we could see additional RMD relief in 2021 if there was a severe market decline. Others believe a 2021 RMD waiver would be unlikely because the relief in 2020 was not targeted to those most in need. Bottom line: RMDs are back in 2021 and it’s important that you plan for them. 

On a related note, we have seen proposed legislation in 2021 relating to the age that you begin taking RMDs in the first place. You may remember the SECURE Act, passed in late 2019, which increased the RMD start age from 70 ½ to 72. There is proposed legislation, called SECURE Act 2.0, which would phase in further increases to the RMD start age. The legislation would ultimately back up the start age of RMD’s to 75, although this would gradually phase in over a decade-long period. We’ll be watching this closely, so make sure to stay connected with Annex for further updates in this area.

Eric Strom, CFP®

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“I love easy access to information – which is why I like The Axiom! As much as I try to catch them, I frequently miss some of the Annex radio segments. With one easy click, I’m up to date!”

– Guest Editor: Patricia Tobin, CFP® | Wealth Manager

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KNOW THE DIFFERENCE MINUTE:

High Prices & Low Supply May Be Cooling Housing Boom

KNOW THE DIFFERENCE MINUTE:

Sephora/Kohl’s & Ulta Beauty/Target Partnerships

WHAT’S THAT?

What’s A 401(k) Loan? 401(k) Loan Definition

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Annex Wealth Management has always been committed to client growth and education. Planning and saving can be demanding. We’ve found that when our clients master key concepts, it often enhances working together to reach their goals. Because these are not sales presentations, our clients benefit from a truly informative experience.

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