1 | Week In Review

Will Inflation Continue At This Pace Through 2022?

The Fed’s dual mandate is full employment and fending off inflation. Friday’s job report indicates what some consider to be full employment – how will the Fed react to inflation rates – and will they continue at their current pace through 2022? Annex Wealth Management’s Dave Spano and Derek Felske discuss.

2 | Poll

Money Questions To Ask Your Adult Children

Are You Saving For Retirement?

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3 | Client Exclusive

Who’s On Your Team?

This week we hear from our in-house Estate Planning Attorney, Jill Martin.

“For anyone that knows me outside of work, they know softball has always been a part of my life. My dad gave me my first glove when I was about 5 years old, and I’ve spent more hours at a ballpark than I could even begin to count. That love of softball extended to attending Brewer games with my uncle and grandma. She was even the one who taught me how to keep a detailed scorebook!

As I got older, I enjoyed success both at the high school and collegiate level, becoming an All-American my senior year and being inducted into the UW-Eau Claire Athletic Hall of Fame in 2010. The individual honors would not have come without amazing teammates who pushed each other to be better and a successful program that won multiple conference championships and NCAA tournaments bids.

But what I learned during those college years on and off the diamond, as a member of a team with great coaches, have created an everlasting impact. Sports provide a venue for so many life lessons: teamwork, communication, dedication, focus, planning and self-awareness that I continue to use today.

The number one lesson I take into every day is to eliminate worrying about what is out of your control and focus all of your energy and effort on what you can control. As I transitioned into coaching, I continued to teach that lesson, as it is valuable in every aspect of life today.

Now that my playing and coaching days are over, I’ve begun to explore new hobbies and experiences. By far my favorite activity now is hiking the Ice Age Trail throughout Wisconsin, with kayaking a close second. Both of which I had never done until after I turned 40. It’s never too late to try something new!

A group of friends decided to get out during the pandemic and we have fallen in love with the adventure. There is something magical about losing yourself in the woods, whether alone for self-reflection or with a group to have real, honest life conversations with while leaving technology behind. It’s become so important to unplug. We are about 150 miles in on our 1,000 mile journey and I look forward to each new adventure life brings.”

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

4 | Did You Know?

Annex Wealth Management helps businesses attract and retain employees.

Annex Wealth Management helps businesses attract and retain employees. Our 401(k) services team works beside HR & Benefits departments with the goal of optimizing their 401(k) benefit. And our Annex Executive team will help HR & Benefits provide additional guidance to executives seeking individual guidance. If you or someone you know could benefit from these services and would like to learn more, visit annexwealth.com/401k-plans-for-business/ or annexwealth.com/executive-financial-counseling-benefit-for-businesses/, or text “my401k” to (262) 439-8888.

5 | Ask Annex

“I would like to gift my son $150,000 to buy a house. I have over $300,000 in my checking and saving accounts. What is the best way to do this?” 

– Christine

We took this question to Annex Wealth Management’s Planning Team: 

Thanks for contacting us. Congratulations on being able to consider helping your son out. You’re wise to ask about the best way to gift funds to your son. Part of the answer involves understanding the gift tax rules, so let’s start there. 

The tax code allows each individual taxpayer to gift up to $16,000 per recipient per year without filing a gift tax return, as of 2022. Previously the amount was $15,000. This is called the annual gift tax exclusion.  

Based on the annual gift tax exclusion described above, if you’re married, you and your spouse may give a combined $32,000 to your son in 2022. As a further option, if your son is married, you could also give his spouse $32,000 as well, which would increase the gift to $64,000 without needing to file a gift tax return. 

Now, fear not. Since the intended amount of your gift exceeds $32,000 or even $64,000, you can still make a full give of $150,000 if you choose to do so. However, by exceeding the annual exclusion for 2022, then a gift tax return should be filed. The good news is that typically, this is a filing requirement and there likely is no gift tax due.  

In addition to the annual exclusion, the tax code provides a lifetime gift and estate tax exemption. As of 2022, the amount is $12.06 million per person. This means a married couple can gift up to $24.12 million during their lifetime and/or at death above and beyond the annual exclusion.  

Filing a gift tax return simply reports the amount given over the annual exclusion so the IRS can apply the gift to your lifetime exemption, reducing your remaining exemption. As long as you have exemption to use during your lifetime, you will not owe any gift tax.  

Another alternative to outright gifts is whereby you finance the purchase, acting as the lender, and taking a mortgage in return so that your son makes payments to you over time. This strategy can also incorporate you forgiving payments, thereby making gifts over time rather than all at once. If you’re interested in learning more about that strategy, we encourage you to talk to an advisor you can trust or an Estate Planning Attorney for more information. 

We hope this helps. 

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.