Retirement Planning Insights

 

Amid lost jobs and a scaled-back economy in 2020, some workers may have decided to retire earlier than planned. There are a couple of Social Security strategies worth considering in this scenario.

First, if both spouses are over age 62, determine if you can make ends meet by taking only one Social Security benefit while letting the other benefit accrue to a higher level. Depending on your circumstances, it may be better to let the higher earner’s benefit accrue untapped as long as possible. This tactic not only provides higher income for the latter stages of retirement, but also allows the surviving spouse to receive a higher benefit – which is important when the household income is cut in half.

A second strategy is to wait until the economy recovers and then look for another job. If you start Social Security and then go back to work in fewer than 12 months, you can stop your benefit and actually pay back the money received. That will reset your start date and enable your benefit to continue accruing until you’re ready to retire again.¹

Remember, there are various strategies you can use to create bridge income should you retire early or just want to give your Social Security benefits and/or investments more opportunity to grow. For example, if you downsize to a less expensive living arrangement, you can use excess equity to create a reliable income stream either throughout a specific period of time, or for life. Please contact us if you’d like to learn more about strategic retirement income solutions.

One of the silver linings of the pandemic was that the average savings rate among Americans increased significantly last year. According to the Bureau of Economic Analysis, the U.S. personal savings rate soared to a record 32.2% in April 2020 – which coincided with many state and local lockdowns. The previous one-month record was set back in May of 1975, at a mere 17.3%. Throughout the past decade, our savings rate has floated between 6-8%.²

Even if for only one month, Americans proved that they could live without many everyday goods and services. For the sake of saving more aggressively for retirement and other long-term goals, consider keeping your savings rate high, even post-pandemic. If that seems too challenging, consider appointing a “cut-back month” when you and your family commit to reducing expenditures just for one month. You may have done that last April; consider doing it again. If you are successful, consider deploying a cut-back month once every quarter.

What’s the best way to accumulate extra savings to build your wealth? Here are the 2021 contribution limits for various tax-advantaged accounts:³

 

·         Employer-sponsored 401(k)/403(b) plans – $19,500 ($26,000 for age 50+)

·         SIMPLE IRA and SIMPLE 401(k) – $13,500 ($16,500 for age 50+)

·         Traditional and Roth IRAs – $6,000 ($7,000 for age 50+)

·         Health Savings Accounts (HSAs) – $3,600 individuals; $7,200 families

 

If you’ve maxed out your available tax-deductible contributions, consider stashing extra cash into a Roth IRA. They’re funded with money you’ve already paid taxes on, so qualified distributions are tax free.⁴ Moreover, a Roth does not mandate required minimum distributions (RMDs) at any age, so if you don’t need that money during retirement, it’s a way to continue accumulating assets for your heirs.

While it is generally recommended that investors save at least 15% of their annual earnings to generate adequate retirement income, that number may need to be higher or lower based on what age you started saving and your retirement goals. To determine the percentage of income (“savings multiple”) you should consider saving going forward, divide your total retirement savings by your annual income.⁵

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!  

¹ Ilana Polyak. BenefitsPro. Dec. 28, 2020. “3 Social Security changes coming in 2021.” https://www.benefitspro.com/2020/12/28/3-social-security-changes-coming-in-2021/. Accessed Feb. 18, 2021.

² Alex Gailey. NextAdvisor. July 31, 2020. “The Pandemic Has Resulted in Record U.S. Savings Rates, but Only for Some.” https://time.com/nextadvisor/banking/savings/us-saving-rate-soaring/. Accessed Feb. 18, 2021.

³ T. Rowe Price. Feb. 4, 2021. “2021 Key Financial Numbers That You Need to Know.” https://www.troweprice.com/personal-investing/resources/insights/key-financial-numbers.html. Accessed Feb. 18, 2021.

⁴  Roger Young. T. Rowe Price. Feb. 3, 2021. “What You Need to Know When Deciding Between Roth and Traditional.” https://www.troweprice.com/personal-investing/resources/insights/what-you-need-know-deciding-between-roth-and-traditional.html. Accessed Feb. 18, 2021.

⁵  Judith Ward. T. Rowe Price. Feb. 4, 2021. “What Adjustments Should I Make to My Retirement Savings?” https://www.troweprice.com/personal-investing/resources/insights/what-adjustments-should-i-make-my-retirement-savings.html. Accessed Feb. 18, 2021

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

 

 

COVID's Toll: A Growing Mental Health Crisis

 

As COVID-19 outbreaks continue throughout the country, quarantining, working from home and at-home schooling have caused many people to suffer from what used to be called “cabin fever.”  Cabin fever has seemed to spark mental health challenges such as anxiety, depression or just plain loneliness. And it seems to be a growing problem.

 

According to data from the Johns Hopkins COVID-19 Civic Life and Public Health Survey last April, over 30% more adults said they were suffering from mental distress than they did two years prior. In August, 41% of adults and 75% of young adults were experiencing mental health challenges. And between May and August, there was a 15% nationwide increase in drug overdose deaths compared to 2019 — which had set the previous record at approximately 72,000 deaths.¹

There is no doubt that isolation can cause mental distress, but in some cases, so does worrying about our finances. Not only do we have to worry about contracting symptoms of the coronavirus, but many people also have been affected by the economic decline. If you’re worried that your financial picture is off track from where you want it to be, we may be able to help. Call to discuss income strategies to potentially help you weather financial challenges.

 

One reason we know the pandemic is worsening mental health issues is that more people are seeking help. Mental Health America (MHA) reports that between January and September of last year, more than 315,000 people took the standard mental health anxiety screen — a 93% increase over the total number the previous year. More than 534,000 people took the depression screen, a 62% increase over the 2019 number. Among those who experienced moderate to severe symptoms of anxiety or depression, 70% say a primary contributing factor was loneliness or isolation.²

 

The lock-down era has been particularly tough on children and teenagers, for whom communal play and socialization opportunities are key to their development. Studies have shown a correlation between forced isolation and loneliness among children with an increased risk of depression. The number of children who visited emergency rooms with mental health issues increased by 24% from mid-March to mid-October in 2020, compared with the same period in 2019; it rose 31% among preteens and teenagers.³

 

One of the most vulnerable demographics during the pandemic has been health care workers. Not only have they been overworked and worried about contracting COVID or passing it on to family members, but many have also experienced stigmatization because other people are afraid of being infected by them.⁴

 

Unfortunately, similar to the physical health impacts of the coronavirus, the effects of mental health issues may linger for many years. It’s important for people to seek help and share their feelings with others so they understand they are not alone in how they feel. Taking time away from “screens” (smartphones, computers and televisions) for personal time, outdoor time and general self-care could be helpful.⁵

 

¹ David E. Wennberg and Patrick J. Kennedy. HealthAffairs. Dec. 14, 2020. “Too Big To Ignore: 7 Recommendations To Address Our Growing Mental Health Crisis.” https://www.healthaffairs.org/do/10.1377/hblog20201210.312139/full/. Accessed Jan. 6, 2021.

² Mental Health America. 2021. “The State of Mental Health in America.” https://www.mhanational.org/issues/state-mental-health-america. Accessed Jan. 6, 2021.

³ Carmen Heredia Rodriguez. US News and World Report. Jan. 6, 2021. “Children’s Hospitals Grapple With Wave of Mental Illness.” https://www.usnews.com/news/health-news/articles/2021-01-06/childrens-hospitals-grapple-with-wave-of-mental-illness. Accessed Jan. 6, 2021.

⁴ Cara Murez Healthday. US News and World Report. Dec. 23, 2020. “Pandemic Taking Big Mental Health Toll on Health Care Workers.” https://www.usnews.com/news/health-news/articles/2020-12-23/pandemic-taking-big-mental-health-toll-on-health-care-workers. Accessed Jan. 6, 2021.

⁵ Ashley Sharp. WJHL. Dec. 14, 2020. “Mental health focus more important than ever at start of 2021.” https://www.wjhl.com/news/mental-health-focus-more-important-than-ever-at-start-of-2021/. Accessed Jan. 6, 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. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

 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

The Future of Transportation

The United States is a very large, land-mass country. Yet, it offers few options in terms of coast-to-coast mass public transit, particularly compared to other developed countries. Europe’s countries tend to be smaller and their cities more dense, making them more transit-friendly. Asian countries made enormous government investments in urban rail networks just as their urban populations began to rapidly expand.¹

In the U.S., however, many metropolitan transit systems are dated and overcrowded. The New York Metropolitan Transportation Council reports more than 6 million rapid rail trips and nearly 1 million suburban rail trips on any given weekday. One way to free up crowded subway platforms is to run more trains so there are fewer passengers on each train.² This would require substantial investments to update the nation’s passenger railway system.

To add to the problem, auto traffic congestion, air pollution and fossil fuels are widely believed to contribute to our growing climate crisis. If there is a silver lining, it’s that the challenge of developing affordable and environmentally responsible transportation options has led to innovations that may help the U.S. develop high-speed rail options comparable to other developed countries.³

Recent market volatility presents a long-overdue reminder that investing is unpredictable and performance can be upended for any number of unexpected reasons. That’s why it’s important to diversify investments and consider companies with solid, long-term growth plans in viable industries. Growth is frequently tied to demand, and transportation offers the potential for long-term investments that respond to mass population needs in a sustainable and environmentally responsible manner. If this is a sector you’d like learn more about, we can help.

To date, the U.S. government has had little success in updating the country’s railway systems due to fiscal debt concerns. Now, the push for improved rail systems is coming from the private sector, including projects with the potential to connect Washington and New York City in one hour, a high-speed train network running from Orlando to Miami, and a high-speed line between Las Vegas and the greater Los Angeles area.⁴

The city of Lincoln, Nebraska, purchased 10 battery-electric, zero-emission public transit buses. This is part of its commitment to reduce greenhouse gas emissions by 100 to 160 tons per bus per year, as compared to traditional clean-diesel buses.⁵

Another mass transit project anticipating a mammoth facelift is the traditional American airport. In terms of updating infrastructure and accommodating future demand, the investment can’t come soon enough. According to the International Air Transport Association, the number of travelers passing through airports worldwide is expected to double, rising to 8.2 billion by 2037.⁶

Because people spend so much of their travel time arriving early for security purposes and waiting during layovers, the future airport is being reimagined as an “aerotropolis.” In other words, they will combine small, technology-enabled hubs with public spaces featuring waterfalls, gardens and walking paths, as well as a plethora of retail and restaurant options.⁷

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

 ¹ Jonathan English. City Lab. Oct. 10, 2018. “Why Public Transportation Works Better Outside the U.S.” https://www.citylab.com/transportation/2018/10/while-america-suffocated-transit-other-countries-embraced-it/572167/. Accessed Feb. 28, 2020.

² Hitachi. 2020. “Key Strategies for Reducing Traffic Jams.” https://social-innovation.hitachi/en-us/think-ahead/transportation/key-strategies-for-reducing-traffic/. Accessed Feb. 28, 2020.

³ Trevor Bach. US News & World Report. Sep. 10, 2019. “U.S. Cities Play Catch-Up on High-Speed Rail.” https://www.usnews.com/news/cities/articles/2019-09-10/us-cities-play-catch-up-on-high-speed-rail. Accessed Feb. 28, 2020.

⁴ Ibid.

⁵ Oil & Gas 360. Feb. 27, 2020. “Nebraska’s StarTran drives sustainability forward with 10 electric buses from New Flyer; celebrates arrival of first zero-emission bus to Lincoln.” https://www.oilandgas360.com/nebraskas-startran-drives-sustainability-forward-with-10-electric-buses-from-new-flyer-celebrates-arrival-of-first-zero-emission-bus-to-lincoln/. Accessed Feb. 28, 2020.

⁶ Honeywell. Bloomberg. 2020. “What’s the Next Hot Destination? The Airport.” https://sponsored.bloomberg.com/news/sponsors/features/honeywell/tbt/?adv=24625&prx_t=r3QFAtMA-AWCkPA. Accessed Feb. 28, 2020.

⁷ Ibid.

Financial Tips for 2020

The U.S. has enjoyed 10 years of a booming stock market and a growing economy. It’s too early to tell how 2020 will look, but there are some signs that it doesn’t look quite as promising. Between warnings of a possible economic pullback and a contentious presidential election year, investors may want to consider financial moves designed to help protect gains and optimize future opportunities.

For example, while domestic securities were global leaders in 2019, Morgan Stanley believes U.S. stocks and bonds will underperform other developed countries in 2020. The wealth manager predicts the S&P 500 Index will have a small decline to 3,000 points by the end of the year as the dollar weakens, corporate earnings edge downward and “unique” political risks are expected in the run-up to Election Day.1

We recommend that individuals take a long view when it comes to investing, particularly in relation to retirement planning. However, as we approach this new decade, it may be important to review your portfolio’s overall asset allocation, not just within the context of 2020, but for your long-term financial objectives. Please give us a call if we can help you make this assessment.

As for retirement planning, be aware of three changes scheduled to impact Social Security benefits in 2020: 2

1. The earnings limit subject to FICA payroll taxes is scheduled to increase by $4,800, to $137,700. This means employees who earn at or above that threshold will pay an additional $367 in payroll taxes during 2020.
2. Retirees received a 1.6 percent boost in Social Security benefits, which translates to roughly $288 (on average) more for the year.
3. Social Security recipients who haven’t reached full retirement age can earn $600 more in 2020 without a benefits reduction — up to $18,240. Beyond that limit, every $2 in earnings will result in $1 withheld in benefits.

It’s a good idea to consider your income tax status early in the year. A lot of people did not expect the Tax Cuts and Jobs Act to negatively impact their taxes and received an unpleasant surprise when they filed returns last year. You can help prevent having to owe additional taxes on filing day by adjusting your Form W-4 exemptions with your employer so that more income is withheld throughout the year.3

Also, consider making your 2020 contributions to tax-advantaged accounts as early in the year as you can. That’s because any contributions you make to accounts such as IRAs, 529s and workplace retirement plans will have more time to take advantage of tax-deferred compounding growth.4

1 Joanna Ossinger. Bloomberg. Nov. 17, 2019. “Morgan Stanley Sees U.S. as a Laggard in 2020 Across Markets.” https://www.bloomberg.com/news/articles/2019-11-18/morgan-stanley-sees-u-s-underperforming-in-2020-across-markets. Accessed Dec. 18, 2019.

2 Kenneth Terrell. Oct. 28, 2019. “What to Know About Social Security Changes for 2020.” https://www.aarp.org/retirement/social-security/info-2019/social-security-changes-look-ahead.html. Accessed Jan. 15, 2020.

3 Kiplinger. Oct. 29, 2019. “27 Money Moves to Make Now to Prepare for 2020.” https://www.kiplinger.com/slideshow/saving/T023-S002-money-moves-to-make-now-to-prepare-for-2020/index.html. Accessed Dec. 18, 2019.

4 Business Wire. Dec. 16, 2019. “20 Financial Resolutions for 2020 from the AICPA.” https://www.businesswire.com/news/home/20191216005073/en/20-Financial-Resolutions-2020-AICPA. Accessed Dec. 18, 2019.

Our firm is not affiliated with or endorsed by the U.S. government or any governmental agency and does not provide tax advice. 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

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. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

Which Category of Wealth Do You Fall Under?

Michael Chamberlain, a contributor to Forbes, says “Wealth management is the utilization of processes, services and products designed to grow, protect, utilize and disseminate one’s wealth.”

Chamberlain also breaks down this sometimes vague definition of wealth into 3 groups. Which category do you fall under? To find out, read the full article on our website!

To find out more about how our firm can help you with wealth management, read more about the services we offer!


No matter what your level of wealth is, it would be worthwhile to sit down with a financial planner and determine a plan to grow, protect, and utilize your wealth before, and after retirement!

At Imber Wealth Advisors, we know that wealth management can be complicated. We want to help you balance your money and your life, so you can have the retirement you’ve always wanted! Our team treats you like family, and we will get to know you personally as we help you plan for retirement. To learn more, contact us today!

What Does Wealth Management Mean for You?

Are you trying to save for retirement?

Are you looking for new investment strategies, new retirement income strategies, and new ways to bolster your nest egg for retirement?

Wealth management can mean different things for different people, and often varies based on the services or products that an individual or firm offers. Similarly, the definition of “wealth” varies between people.

To find out the best wealth management strategy for you, talk to a financial planner! At Imber Wealth Advisors, our family-focused team will get to know you personally so we can help you plan your perfect retirement.

To learn more about wealth management and how we can help, visit our website.