1 | Week In Review

GDP Down, Employment Low: Is This A Recession?

As many expected, GDP was negative for a second consecutive quarter. But with strong employment figures and slightly upbeat earnings, are we truly in a recession? Annex Wealth Management’s Dave Spano and Derek Felske discuss.

2 | Poll

Required Minimum Distributions Common Questions: Poll Recap Part 1

Over the past four weeks, we quizzed readers on their knowledge of Required Minimum Distributions (RMDs).

We started week 1 with the basics: What are Required Minimum Distributions (RMDs)?

The majority (96%) of readers had a baseline understanding of RMDs down, answering: RMDs are the minimum amounts that you must withdraw annually from your traditional IRA, 401(k), 403(b), or other retirement savings plan once you’ve reached the mandatory age for making withdrawals. Great work!

Week 2 dug a little deeper into the knowledge base: What’s the Mandatory age you should begin taking Required Minimum Distributions (RMDs)?

This time answers varied. 13% of readers answered: A. If you were born before July 1, 1949, you must begin taking RMDs by April 1 of the year following the year you turn 70½. The CARES Act suspended RMDs for 2020. RMDs for 2021 must be taken by April 1, 2022. While another 40% of readers answered: B. If you were born on or after July 1, 1949, you must begin taking RMDs by April 1 of the year following the year that you turn age 72. 7% of readers chose None of the above.

This was a bit of a trick question. The correct answer was: A and B – which 40% of readers got right.

Week 3 we asked: How Do I Calculate The RMD?

4% of readers answered: All Assets minus Total Account Balance. 61% of readers answered: Total Account Balance divided by a Distribution Period. 0% of readers answered: Total Account Balance multiplied by Yearly Stock Earnings. 35% of readers answered: None of the above.

The correct answer? Total Account Balance divided by a Distribution Period. (61%)

The RMD for any given year is the total account balance in your traditional IRA, or IRAs, as of the end of the immediately preceding calendar year divided by a distribution period. You can find the distribution period using the IRS’s Joint Life and Last Survivor Expectancy Worksheet if your spouse is the sole beneficiary and is more than 10 years younger than you, or the Uniform Lifetime Worksheet for all other IRA owners.

Note: RMDs are calculated using the life expectancy tables issued by the IRS in Publication 590-B. Updates to the life expectancy tables will go into effect January 1, 2022. Check the IRS website for updates.

Finally, on week 4 we asked: What if I don’t take any distributions, or if the distributions I take don’t meet the RMD amount?

0% of readers thought the punishment involved jailtime, only 1% of readers thought you’d lose all money in the account, and another 11% of readers answered: None of the above.

88% of readers answered correctly: You may have to pay a 50% excise tax on the amount not distributed.

If you enjoyed testing your Required Minimum Distributions knowledge, stay tuned! We’ll be asking more RMD questions over the coming weeks.

3 | Client Exclusive

Who’s On Your Team?

This week we hear from Deanne Phillips, CFP®, CDFA®, ABFP^sm. Deanne is the Director of Client Learning & Development and works out of our Elm Grove office. Outside of Annex she can be found training for body building competitions.

Keep reading for this week’s edition of Who’s On Your Team?

When and how did you get into body building?

While I’ve been into fitness of some sort all my life, my recent adventures began in 2016. I was having some bigger health issues and needed to make some decisions to get myself onto a better, healthier track. I started kickboxing for fun, where I ended up losing about 45 pounds, plus lifting weights. The idea of lifting had always intimidated me a little bit. I would go to the gym and not really know what to do, so I hired a trainer who showed me the ropes. I found that I really enjoyed the habit of going to the gym, eating cleaner, and the routine it created in my life as I became a healthier version of myself. (Not to mention the stress reduction benefits!) After a while, my trainer suggested I compete, and I decided to enter back into that level of training.

What kind of program do you follow to prepare for competitions?

I belong to a team out of Las Vegas, Team Elite Physique, with several coaches for diet & nutrition, lifting, posing. I also have doctors who watch my supplements and monitor different important hormone and blood levels.  It’s a holistic process and involves a lot of meal preparation.  I’ve become a de facto expert on the many different ways to prepare chicken, egg whites, and veggies. 

Is there anything that was hardest to adapt to when you started training?

I think adapting to eating clean foods can be challenging, as well as taking the time to make something a habit.  I love what I eat now, because I feel so much better!  I can’t wait to hit my 5am workouts, too. It does take a while to integrate something into our lives and make it a habit, then an actual lifestyle.  A lot of times we are tempted to quit just before we start seeing results.  Developing a habit takes time and discipline and means putting your goals first.  For me means saying no to eating out, or having that glass of wine while in contest preparation, which can be 16 weeks or so.

What has been the most rewarding part of this experience?

After starting with a new coaching team last September where the focus was on holistic me, my growth was astronomical! I ended up number two in the nation in my category in my latest competition.  But the feeling of continual improvement can’t be beat.  Getting on stage to compete and show the results is really fun, but the day-to-day routine is satisfying; especially when you see the improvement over time.  This process has really reinforced the value of patience and continuous hard work when results aren’t immediate.

Is there an aspect of your training/competitions that you can apply to your role at Annex?

Yes! Wealth building can be like body building – we tend to be impatient with our expectations. Often, we’ll seek quick results, even though discipline and patience often accompany success. Just like our body’s progress to a healthier place takes time and we can have setbacks, it’s easy to lose patience and want that quick, easy solution.  But both take time, patience, and planning.  Both involve building and not necessarily an end game.  Both evolve and change as life does. That’s what keeps it interesting. 

Have feedback, an idea you’d like us to write about, or a story to share? Send us an email at cl************@*********th.com.

Annex Wealth Management has more than a dozen CERTIFIED FINANCIAL PLANNER™ professionals on our team. 

This in-house group of experts each spent upwards of 4,000 hours gaining experience to earn their certification, and are continuously using the skills they’ve learned to help clients work towards their financial goals.

At Annex, we encourage our team members to continue their educations and further expand their skills and financial know-how. We strive to not only inspire this with our own team, but also our clients. That’s why we offer free workshops, webinars, videos, and more for you to explore the different avenues of financial education.

Learn more about Annex’s Financial Education & Discovery by visiting our website!

 http://annexwealth.com/financial-education-discovery/

COLAs, Retirement Planning, HELOC, The Wash Rule, & HSA Alternatives

Annex Wealth Management’s Sarah Kyle and Randy Winkler, CFP® answer several Ask Annex questions:

“New to social security. Is there always a COLA, and what is it pegged to?” – Anonymous

“Retiring next year at 64. House needs projects, roof, deck. How do I plan for those expenses in retirement? Not worried about retirement cash flow.” – Tim

“What’s your opinion of using a HELOC since rates are rising? Explain HELOC.” – Eddie

“Can you explain the Wash Rule?” – James

“I don’t have access to an HSA. Is there an alternative?” – Chet

Do you have a question for Annex Wealth Management? Drop it here: annexwealth.com/ask

6 | Quote of the Week

7 | Annex Radio

Events & Webinars

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.