1 | Week In Review

How Will The Fed React To Inflation?

With geopolitical unrest threatening and inflation at 40-year highs, the markets and many analysts wait to see how the Fed will react. The Fed acknowledges it hasn’t moved as responsively as it might have; but will their actions maintain a delicate balance? Annex Wealth Management’s Dave Spano and Derek Felske discuss.

2 | Poll

Noticing A Larger Bill At The Grocery Store?

You may have started noticing inflation months ago with meat price increases. Many farmers are blaming fertilizer price increases along with crop seed price increases. It costs more to feed the animals, therefore making the price of meat higher.  

Today, many of us are seeing inflation on nearly all the shelves at the store. In January, the Labor Department quoted a sharp rise of a 7% surge in general food prices, an increase that hasn’t been reported since 1981. 

With no reprieve in sight, the prices at the grocery store will keep rising to offset the costs of production. How will you adjust? 

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https://www.foxbusiness.com/economy/farmers-feel-the-squeeze-of-inflation

3 | Client Exclusive

Glass blowing – a long-standing art form, or a new hobby?

If you haven’t tuned into the Netflix reality show Blown Away, you might not know the long history of glassblowing, how it’s come to be discovered, and how through years of perfecting the technique, it’s now accessible to anyone who wants to give it a try.

Before man, nature was the original glassblower. When lightning strikes a sandy beach, glass rods called fulgurites form in the sand where the most heat is transferred. Also, when a volcano erupts and sand and lava fuse, dark colored glass called obsidian is formed.[1] Creating glass takes an extreme amount of heat and the right natural materials, but nature found a way.

It wasn’t until the first century B.C. in Syria that people attempted to recreate the natural process of not only making glass but having enough control of it to form a shape. Glass is known as an amorphous solid. The two words don’t seem like they’d go together, but they describe glass perfectly. It’s solid, but it has a molecular structure that is random, like a liquid. Its amorphous structure is what makes it transparent, meaning light can get through it easily just like with liquid.[2] Once craftsman began to understand the properties and process of making glass, it didn’t take long before they began to experiment.

As the craft began to grow, glass became a faster product to produce, and replaced clay for everyday products. In the Middle Ages, the process called Lampworking became popular for the intricate and detailed pieces that were created using this style. Lampworkers created beads, vessels, and small containers, while glassblowers typically worked with larger quantities.

The Italians were so proud of their lampworking craft that they sequestered their artists to an island called Murano in order to keep their advanced techniques a secret from the rest of the world and ward off competitors of the highly profitable product.[3] Artisans lived in fear of punishment by death if they shared their secrets. Lampworking eventually made its way off the island, but Italy remains one of the masters of the craft throughout the world.

So, what is glassblowing after all? Well, it is exactly as its name suggests. Glass is heated to a molten temperature of 2,100 degrees Fahrenheit so it becomes liquified and easier to work with. Once it reaches that temperature, the liquified glass is placed onto the end of a thin tube, where the artist actually blows softly in order to expand the glass.[4] Controlling the amount of air and the pressure is an essential part the process – you only need enough air to blow out a candle to do the job. The artist uses breath, tools, and gravity to shape the glass as it slowly begins to cool. Artists also can create molds of intricate shapes and then blow the glass into the molds.[5]

The glass is often reheated several times during the creation process in order to maintain its workability, but when the product is done, the glass takes hours, or even days, to cool in a temperature-controlled chamber called an annealer to avoid breaking the glass by rapid temperature changes.

The possibilities seem almost endless for shapes, patterns, and colors on each piece. Adding certain minerals and elements to the hot glass can create different colors. For example, cobalt is added to clear glass to create a rich blue color, and gold salts are added to create a light pink when put in the intense heat.[6]

Interested in trying it for yourself? Thanks to the many hundreds of years of craftsmanship and knowledge, glassblowing is an artform that has lasted through the ages and has become accessible to more than just certified artists. Check around your area for an art studio that offers classes for all experience levels. Learn a new skill and witness the amazing transformation of glass into a beautiful or functional object right before your eyes!

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

[1] https://coursehorse.com/nyc/guides/glassblowing

[2] https://coursehorse.com/nyc/guides/glassblowing

[3] https://workingtheflame.com/glass-blowing-facts/

[4] https://workingtheflame.com/glass-blowing-facts/

[5] https://www.khanacademy.org/partner-content/getty-museum/antiquities/ancient-glassmaking/a/glassmaking-history-and-techniques

[6] https://grayartglass.com/blogs/news/how-do-you-colour-the-glass-in-glassblowing#:~:text=The%20answer%20is%20minerals%20and,See%20it%20for%20yourself!

4 | Did You Know?

Education is an important part of our relationship with you. 

We always want to help you better understand your finances and what it takes to get to your goals and dreams.

In the past, we’ve offered a seminar called Moving in Retirement, focusing on understanding all the complexities that come with the transition in and through retirement. There are lots of important questions to ask yourself as you prepare, such as ‘who do you want to be in retirement’ and ‘what do you want’.

We’ve put together a limited video series talking more about the intricacies of moving locations after you retire, and all that is involved.

Check out the first episode of our series, hosted by our own Deanne Phillips and Tom Parks. Watch them all, or space them out, but they’ll be here for you when you need the information.

WATCH: Moving In Retirement: Episode 1 | Who Will You Be?

5 | Ask Annex

“I have inherited an estate with an IRA in which I have 10 years to liquify. I am also executor of the will in which I need to give out some money, I want to divide the bulk of the IRA to my children and I need advice on how best to do that, considering taxes, etc.“

– Lois

Annex Wealth Management’s Estate Planning Attorney, Jill Martin, responded:  

Hi Lois, thanks for your inquiry. From the sounds of it, your “Ask Annex” contains 3 distinct, but related questions. 

As the beneficiary of an IRA, the general rule*, as you stated, is the beneficiary has a 10-year timeframe to fully distribute the account to themselves. For example, if you inherited an IRA from your mother who died in 2021, normally, as the beneficiary, you would open an inherited IRA in your name and then have until December 31, 2031, to fully distribute the account.  

If the inherited IRA was a traditional IRA, then you will be taxed on each distribution you take out of the account during that 10-year period. If it was a Roth IRA, then you likely will not be taxed on any of those distributions. 

Once the Inherited IRA is in your name, then you must take those distributions. If you ultimately want the money to go to your children, then you would need to make a gift to them. But be aware that the distributions are taxed to you. The gift of cash to your children is not taxable to them. 

If you have not yet moved the IRA into your own Inherited IRA, an option to consider would be a qualified disclaimer, which is when a beneficiary indicates they do not want to receive a portion or all the inheritance they are entitled to receive.   

A disclaimer treats you as deceased related to the portion you disclaimed so that amount goes to the next beneficiary entitled to receive according to the estate plan or beneficiary designation. You do not get to decide who receives the funds you disclaim. So, it is important to retain legal counsel to be advised of the consequences of a disclaimer and to properly draft the documentation to make it effective. 

As the executor, you are tasked with following the last will and testament of the deceased individual and making distributions according to its terms. Often it is desirable and easier to liquidate the assets in an estate, so each beneficiary receives cash, but this may depend on the type of assets that make up the estate.   

Tax consequences are also very dependent on the type of assets that make up the estate and the timing of when the distributions occur compared to the date of death. It’s recommended that executors work with a CPA (Certified Public Accountant) or attorney to help them sort through all aspects of the estate administration. 

* There are some exceptions to the 10-year rule based upon the beneficiary’s relationship to the account owner or the health of the beneficiary.

6 | Financial Fact

Long-Term Care Planning: Assisted living costs an average of $4,300 per month.

consumeraffairs.com

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.