Imber Wealth Advisors: July 2021

Monday, July 26, 2021

How to Help Prevent Aging

There is no magic pill that will keep us from getting older. Trendy fashions, dancing like no one’s watching and laughing with friends can make you feel young and invincible, but it won’t stop the process. Aging is biological, and inevitable.

And yet, something many people fail to learn until they get older is that inflammation is one of the body’s fastest aging processes. In our youth, we may twist an ankle or have some other injury that causes swelling. Acute inflammation is the body’s way of fighting off infection by enabling white blood cells to flood the affected area to protect and heal. Throughout time, however, chronic, low-grade inflammation leads to a plethora of old-age conditions, such as cardiovascular disease, cancer and dementia. Researchers refer to this type of persistent, low-level inflammation associated with aging as “inflammaging.”¹

To make matters worse, chronic inflammation can be exacerbated by bad habits we can pick up as we get older. These behaviors include:

· Smoking

· Poor diet

· Drinking alcohol

· Not getting enough physical activity

· Too much stress

· Weight gain

· Not getting enough sleep

Inflammation can remain in the body long after we start feeling better. Even if you hate taking pills, and don’t necessarily feel the benefits, anti-inflammatories work hard to reduce inflammation in the body. One of the key ways to prevent the ailments of old age is to reduce inflammation on an ongoing basis. It’s like exercising and maintaining a healthy weight – a lifelong effort that only gets tougher as we age. The types of medications physicians often prescribe for inflammatory diseases include corticosteroids, immunosuppressants and biologics.²

However, there are trade-offs that accompany getting older. For all the frustration that comes with physical changes, complicated relationships and money woes, there is wisdom, experience, and, at some point – the lucky ones – start caring more about how they feel than what other people think. Please feel free to contact us if you are looking to expand your horizons for your financial future.

Our internal organs aren’t the only ones affected by inflammaging. Research shows that chronic, low-grade inflammation contributes to the aging of our skin. As we get older, our skin loses epidermal pH, hydration and the permeability barrier that helps retain water and protect against bacteria and other pathogens. This loss of moisture causes the skin to release inflammatory signals that eventually reach the blood. Scientists are looking at ways to use topical creams to reverse age-related skin damage to prevent the development of downstream diseases caused by inflammation.³

Much like our financial situation, there are things we can do to help ward off the effects of inflammaging. Fortunately, many are the same tactics that enable a healthier lifestyle, like aerobic and resistance exercise, which can help reduce weight problems strongly associated with a pro-inflammatory state. Dietary supplements such as amino acids or protein, vitamin D and polyunsaturated fatty acids are known to have anti-inflammatory and antioxidative properties. That age-old advice of adopting the anti-inflammatory Mediterranean diet turns out to be the only behavioral factor that is consistently associated with a lower risk of frailty in old age.⁴

Other components of an anti‑inflammation diet include brightly colored fruits and vegetables, such as cooked tomatoes, carrots, squash and broccoli. They contain substantial amounts of antioxidants, which are believed to reduce the effect of free radicals that damage cells. Other inflammation fighters include high-fiber foods, such as legumes and whole grains (e.g., barley, oats, bran) and fish rich with omega-3 fatty acids (e.g., salmon, mackerel, sardines, tuna).⁵

In short, diet and exercise can help control inflammaging so that our internal organs retain youthful qualities as well as our external appearance.

We take pride in assisting our clients with incorporating all aspects of their life into their Retirement Roadmap 360®. Take control of your financial future and give us a call at (734) 769-1719 today to see how we may be able to help you!

Content prepared by Kara Stefan Communications.

¹ James Kingsland. Medical News Today. 2021. “Immune aging and how to combat it.” https://www.medicalnewstoday.com/articles/immune-aging-and-how-to-combat-it. Accessed May 17, 2021.

² WebMD. March 18, 2021. “How to Reduce Inflammation as You Age.” https://www.webmd.com/healthy-aging/how-to-reduce-inflammation-as-you-age#1. Accessed May 17, 2021.

³ Dana Smith. University of California at San Francisco. March 13, 2019. “Skin Repair Reduces ‘Inflamm-Aging’ Factors Linked to Chronic Disease.” https://www.ucsf.edu/news/2019/03/413576/skin-repair-eliminates-inflamm-aging-linked-chronic-disease. Accessed May 17, 2021.

⁴ Luigi Ferrucci and Elisa Fabbri. National Institutes of Health. Sept. 20, 2018. “Inflammageing: chronic inflammation in ageing, cardiovascular disease, and frailty.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6146930/. Accessed May 17, 2021.

⁵ Harvard Medical School. May 1, 2020. “Quick-start guide to an anti‑inflammation diet.” https://www.health.harvard.edu/staying-healthy/quick-start-guide-to-an-antiinflammation-diet. Accessed May 17, 2021.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Investment Advisory Services are offered by Imber Financial Group, LLC., a Registered Investment Adviser firm. Insurance services are offered through Imber Wealth Advisors, Inc. Imber Financial Group, LLC. and Imber Wealth Advisors, Inc. are affiliated companies

Monday, July 19, 2021

All About RMDs

There really is a purpose behind required minimum distributions (RMD) of tax-advantaged retirement accounts. IRAs and employer-sponsored retirement plans feature tax-deferred income contributions and earnings growth throughout the lifetime of the account. There’s just one catch — when you take money out of that account, it then gets taxed at ordinary income tax rates. Some retirees use that money to pay for their expenses, but others may not need it and would rather let it continue growing, untaxed, and then leave it to heirs.

That means that retirees who need the money are taxed and those who don’t could avoid the tax. Those tax revenues are used to fund government programs, but we are fortunate to have decades of a tax reprieve so gains can accumulate faster.

Retirement investing, and RMDs in particular, can be rather confusing. But just because something is difficult — and ever changing — doesn’t mean we shouldn’t take advantage of the options available. Quite the opposite — tax-deferred investing is a way to optimize the accumulation of wealth, so it’s worth the time and effort to understand how these accounts work.

You can tap the advice of a financial professional to help you manage your retirement accounts, even those that fall under an employer plan. After all, your employer isn’t going to help you manage the rest of your portfolio, so feel free to call us if you have questions about your tax-advantaged accounts and their distribution options.

In 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act, with several changes regarding RMDs. Prior to the legislation, retirement account owners had to start RMDs at age 70½; the law increased that age to 72 for anyone born after June 30, 1949. Those with a traditional IRA must take their first RMD by April 1 of the year after which they turn age 72, even if they haven’t retired yet. Each year thereafter, they must take an RMD by Dec. 31. Investors with multiple IRAs must calculate the appropriate RMD for each one, but they can take that total amount from just one of the accounts they own. That’s easier to do with traditional IRAs than with multiple prior employer retirement accounts, which require contacting former employers to calculate and send the distributions.¹

There is a penalty for not taking the appropriate RMD: The account owner must pay a 50% excise tax on the amount not distributed each year. Also note that you cannot withdraw a couple’s total RMD from just one spouse’s account or a different type of qualified account.²

The rules for an inherited IRA can be confusing, and they also changed with the recent SECURE Act. Specifically, it is now prohibited for a non-spouse IRA beneficiary to “stretch” out taxable distributions throughout his life expectancy. Starting in January 2020, the named beneficiary is required to withdraw all funds within 10 years of inheriting the account. However, unlike before, the heir can wait the full 10 years before taking distributions, meaning there are no RMDs each year.³

The inherited IRA rules didn’t change for a spouse who inherits a wife’s or husband’s IRA upon death. She also has more options for withdrawals, such as the ability to designate herself as the new account owner, roll it over to her existing IRA or take distributions as a beneficiary.

Be aware that these distribution rules do not apply to a Roth IRA, either directly owned or inherited. Since the Roth is funded with already-taxed income, withdrawals are tax-free in retirement — even the gains accrued over time. The only caveat is that the owner (or original owner, if inherited) must have owned the account for at least five years (the clock starts on Jan. 1 of the year of the first contribution). Contributions withdrawn before that five-year holding period may be taken tax free, but any withdrawn interest is taxable.⁴

Annuities also benefit from tax-deferred growth, but the account owner takes RMDs only if it is classified as a qualified annuity, meaning that it was funded with pre-tax money. Non-qualified annuity contracts are funded with after-tax income and feature tax-deferred earnings, so they do not mandate RMDs and are taxed upon distribution.⁵

Content prepared by Kara Stefan Communications.

¹ Judith Ward. T. Rowe Price. May 11, 2021. “Five Important Things You Should Know About RMDs.” https://www.troweprice.com/personal-investing/resources/insights/five-things-you-should-know-about-rmds.html. Accessed May 21, 2021.

² Denise Appleby. Investopedia. April 21, 2020. “Required Minimum Distributions: Avoid These 4 Mistakes.” https://www.investopedia.com/articles/retirement/04/120604.asp. Accessed May 21, 2021.

³ Fidelity. June 1, 2020. “SECURE Act rewrites the rules on stretch IRAs.” https://www.fidelity.com/learning-center/personal-finance/retirement/secure-act-inherited-iras. Accessed May 21, 2021.

⁴ Barbara Weltman. Investopedia. Feb. 15, 2021. “The Rules on RMDs for Inherited IRA Beneficiaries.” https://www.investopedia.com/articles/personal-finance/102815/rules-rmds-ira-beneficiaries.asp. Accessed May 21, 2021.

⁵ FINRA. 2021. “Required Minimum Distributions—Common Questions About IRA Accounts.” https://www.finra.org/investors/learn-to-invest/types-investments/retirement/rmds-questions-about-ira-accounts. Accessed May 21, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Monday, July 12, 2021

21st Century Tree-Hugging Stratei

The phrase “tree hugger” refers to an environmentalist who advocates for the preservation of woodlands. Its original historical reference is to an incident that occurred in India in 1730, when local villagers literally hugged trees in an effort to prevent foresters from chopping them down for materials to build a palace. In doing so, more than 360 villagers were killed by the foresters; but the slaughter finally stopped – and the trees lived.¹

That’s a pretty awful tale behind a phrase used to describe people trying to preserve nature. But the long-derided annals of tree huggers are now becoming an economic necessity. These days, environmental researchers say that the preservation and planting of forests is one of the easiest, most cost-efficient and most effective ways to remove harmful carbon dioxide from the atmosphere. According to the Intergovernmental Panel on Climate Change (IPCC), boosting the world’s total area of forestry, woodlands and woody savannahs – which absorb and store atmospheric carbon – could limit global warming to above pre-industrial levels.²

Why does this matter? The economic, health and financial impacts of global warming and subsequent extreme weather incidents are beginning to impact us already – and will only get worse. For example, flood and homeowners insurance premiums will continue to rise to reflect more frequent and intense weather vulnerability. It’s important to ensure your household finances – both hard and financial assets – are well protected from unforeseen events. Feel free to contact us for a comprehensive insurance review.

As floods, wildfires, hurricanes and volcanoes impact vulnerable countries and communities, economists expect a surge in migration, reduced productivity and increased crime. One groundbreaking report headed by a former World Bank chief economist predicted that the economic costs of climate change could lead to a potential 20% decline in global GDP.³

The good news is that climate action is expected to drive economic growth throughout the 21st century. The recent infrastructure package proposed by the Biden administration includes investments to help the U.S. “win” the global electric vehicle market and advance clean energy to secure our electric grid.⁴ These investments are important to help the U.S. keep pace with other developed countries. For example, Europe is investing hundreds of billions of euros in renewable-energy capacity, such as zero-emission trains. China also is spending hundreds of billions of dollars to build manufacturing capacity for electric vehicles, solar panels and other clean-energy technology.⁵

Not only can tree-planting and other strategies help shore up global economies and household budgets from the detrimental effects of extreme weather events; there are aesthetic benefits as well. For example, the city of Paris is looking to replace half of its 140,000 on-street parking places throughout the city, including in residential areas, with a variety of green projects. Citizens have the option to weigh in on local projects that include planting more trees and shrubbery, urban vegetable gardens, food composting areas (similar to recycling centers), children’s playgrounds, bicycle lock-up areas and hygienic public restrooms.⁶

In short, the “green industrial revolution” is poised to provide the biggest financial opportunity since the last industrial revolution. And with the backing of every major country in the world, it may well become the biggest in history.⁷

¹ Cyrena Lee. Getaway House. Oct. 13, 2018. “A History of Tree Hugging.” https://journal.getaway.house/a-history-of-tree-hugging/. Accessed May 5, 2021.

² Simon L. Lewis, Charlotte E. Wheeler, Edward T. A. Mitchard and Alexander Koch. Nature. April 2, 2019. “Restoring natural forests is the best way to remove atmospheric carbon.” https://www.nature.com/articles/d41586-019-01026-8. Accessed May 5, 2021.

³ Justin Worland. Time. April 15, 2021. “The Pandemic Remade Every Corner of Society. Now It’s the Climate’s Turn.” https://time.com/5953374/climate-is-everything/. Accessed May 5, 2021.

⁴ Ibid.

⁵ Ibid.

⁶ Natalie Marchant. World Economic Forum. Dec. 7, 2020. “Paris halves street parking and asks residents what they want to do with the space.” https://www.weforum.org/agenda/2020/12/paris-parking-spaces-greenery-cities/. Accessed May 5, 2021.

⁷ Dale Vince. City A.M. April 30, 2021. “The hippie economy: tree-huggers and capitalists are a match made in heaven.” https://www.cityam.com/the-hippie-economy-tree-huggers-and-capitalists-are-a-match-made-in-heaven/. Accessed May 5, 2021.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.

Tuesday, July 6, 2021

How Infrastructure Spending Affects Municipal Bonds

According to the American Society of Civil Engineers, the 10-year tab to meet the country’s basic infrastructure needs is about $6 trillion. The report, published in March, includes $125 billion needed for bridge repairs, $435 billion for roads and $176 billion for the nation’s transportation systems.¹

For more than 200 years, municipal bonds have been used as public financing instruments in the U.S. Today, two-thirds of infrastructure projects such as schools, hospitals, highways and airports are financed by municipal bonds.²

In addition to providing revenue for infrastructure projects, muni bonds offer an attractive investment opportunity. They provide tax-advantaged yields for current income, stable credit quality and a risk-averse allocation for an investment portfolio. One way to diversify municipal bond investments is through a municipal bond fund or ETF. Given the potential for increased interest and investment in infrastructure in the foreseeable future, we’re happy to discuss opportunities suitable for your portfolio. Give us a call if you’d like to learn more.

President Joe Biden recently proposed a $2.3 trillion plan to invest in the nation’s infrastructure. One funding option Congress may consider is the Build America Bonds (BAB) program, which was introduced during the Great Recession as a means to fund recovery efforts through infrastructure repairs and development. BABs were originally structured for states, cities, schools, airports, mass transit agencies and other public entities to sell for a limited time. They were particularly attractive because the federal government kicked in 35% of interest costs.³

Stimulus packages over the past year have benefited the municipal market by making funds available to state and local governments to make up for lost sales tax revenues due to lockdowns and the beleaguered economy.⁵ Now, with more revenue available, local public agencies may be inclined to issue debt for capital purposes.

Bonds backed by states and cities tend to have high credit ratings and low default risk, and the federal government underwriting municipal debt makes them even more attractive. Historically, muni bonds have offered rates as high as 7% or more.⁶Furthermore, given the potential that an expensive infrastructure bill may be supported by an increase in income tax rates, municipal bonds offer an opportunity for investors to shield income from taxation.⁷

¹ Thomas Franck. CNBC. March 26, 2021. “Build America Bonds may be key to financing Biden’s infrastructure plans.” https://www.cnbc.com/2021/03/26/build-america-bonds-may-be-key-to-financing-bidens-infrastructure-plans.html. Accessed May 5, 2021.

² Jenna Ross. Visual Capitalist. Nov. 4, 2019. “From Coast to Coast: How U.S. Muni Bonds Help Build the Nation.” https://www.visualcapitalist.com/municipal-bonds-build-nation/. May 5, 2021.

³ Karen Pierog. Reuters. March 31, 2021. “Build America Bonds may stage a comeback in Biden’s infrastructure plan.” https://www.reuters.com/article/usa-biden-infrastructure-bonds/build-america-bonds-may-stage-a-comeback-in-bidens-infrastructure-plan-idUSL1N2LR1UZ. Accessed May 5, 2021.

⁵ Sanghamitra Saha. Nasdaq. April 7, 2021. “4 Factors Why Muni Bond ETFs Could Rally.” https://www.nasdaq.com/articles/4-factors-why-muni-bond-etfs-could-rally-2021-04-07. Accessed May 5, 2021.

⁶ Ibid.

⁷ Franklin Templeton. March 18, 2021. “Stimulus and Infrastructure: Boon for Muni Bonds?” https://www.franklintempleton.com/investor/tools-and-resources/investor-education/talking-markets-podcast/stimulus-and-infrastructure-boon-for-muni-bonds. Accessed May 5, 2021.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.