What you want out of retirement might be more of an impulse or a reaction than a plan. It’s time to ask yourself – and those who will be spending retirement with you – questions about how you’d like to spend your years. In this episode, we’ll discuss how others approach what they want, and answers you’ll need to create a well-built retirement plan.

The ADP Labor report seemed disconnected from the unemployment report, which leaves some uncertain on what will happen when inflation numbers are reported. Many expect higher inflation due to rising energy prices – how will the markets – and the Fed react? Annex Wealth Management’s Dave Spano and Derek Felske discuss.

Almost 50 years ago, sportswriter Leonard Koppett proposed a connection between who won the National Football League’s (NFL) championship game and how the stock market did over the following 11 months.

In a nutshell, the Super Bowl Indicator simply says that if the winning team is from the National Football Conference (NFC), or was in the NFL before its 1966 merger with the American Football League, then stocks will have a bull market that year. If the winning team comes from the American Football Conference (AFC), then the next year will see a bear market.

From 1967-2015, the indicator had an accuracy rate of 82%, missing only nine out of 49 games. However, over the last six years, the predictor has been off. As of the last Super Bowl, the predictor has been right 41 out of 55 games, a 75% success rate.

Super Bowl Indicator Definition (investopedia.com)



This week’s MoneyDo is to consider the potential costs of long term care. 

Long term care becomes necessary when we can no longer perform activities of daily living by ourselves like bathing, getting dressed, or eating. The care provided is not rehabilitative in nature. Therefore, health insurance or Medicare won’t cover it. 

Without special insurance to cover long term care needs, the expense will be funded “out of pocket.” One question to ask yourself is “Do I have enough income and/or assets to pay for long-term care? Is long term care insurance necessary?” 

We believe there are three primary concepts to consider when weighing long term care insurance: the financial ability to pay for long term care, spousal impoverishment, and the impact long term care has on legacy goals. Consider this example: 

  • Bob is single and lives on pension income, Social Security and $800,000 of investments. He is not concerned if he leaves a legacy after his death. 
  • After a little research, Bob estimates long term care could cost him $115,000 per year in his area. 
  • After a complete analysis which considers his annual spending and other retirement goals, he determines he can afford at least 3 years of long term care in the future. 
  • He decides to fund any possible long-term care expenses from his income and investments. 
  • He makes the decision to not purchase a long-term care policy. 

Bob’s mindset may change if he’s married or has kids. At once, the long-term care decision has become more complex, since asset depletion could impact more than just Bob. His span of concern would include his wife, who could become impoverished, or that he’d potentially be leaving his kids very little as a legacy. 

As a husband and a parent, Bob may determine a long-term care policy would cover a significant portion of his long-term care expense, thus leaving assets to his wife to maintain her lifestyle and a possible legacy to their children. 

Make sure you consider how long you’ll have to pay long term care insurance premiums. You’ll typically need to keep paying long term care insurance premiums throughout your retirement to keep the insurance in force. 

In other words, you’ll need enough spare income in your retirement to pay the premiums. Depending on the size of those premiums, this can be a significant factor. Long term care insurance is not inexpensive. 

So, consider this MoneyDo carefully. We suggest reviewing your financial plan. Make sure your goals will remain intact if there is a need to cover long-term care expenses in the future. 


Annex Wealth Management’s Eric Strom, CFP® had these insights:  

The answer is, maybe. Generally speaking, with each premium payment your husband has made over the years to pay for that life insurance policy, he has been building up what is called cost basis. The cost basis is his money that he’s already paid taxes on that is “inside” the life insurance policy. If his life insurance policy is the type that builds up cash value, then he has the benefit of cashing in the policy whenever he chooses, though as a side note – he’ll want to consider if there are surrender charges or any other fees that may reduce his cash value upon surrendering. 

If, at the time he cashes in the life insurance policy, the cost basis is higher than the cash value, he will typically owe no taxes at all. On the other hand, let’s say that it’s an older policy that’s been growing for a while, it could be that the reverse is true – the cash value is higher than the cost basis. In that case, typically all of that difference will become immediately taxable as ordinary income in the tax year the policy is surrendered. Ordinary income is generally considered less tax efficient, so you’ll want to be extra careful here. 

Other factors such as policy loans can affect the taxable gain as well. Please have the policy professionally reviewed to determine the tax consequence, and to discuss the pros and cons of cashing in the life insurance. We at Annex offer that service and would be happy to help you with exactly that, just reach out to us if you are interested. Our team reviews hundreds of life insurance policies every year, so we’re glad to help you too!