Imber Wealth Advisors

Wednesday, February 10, 2021

The Pros & Cons of Corporate America's Remote Work Trend

Post-pandemic, will everyone go back to the office like nothing ever happened? Will lost jobs be recovered? Or is remote work and skeleton staffing a trend here to stay?

A recent survey of company leaders revealed that eight in 10 plan to allow employees to work outside the office at least part time going forward. Nearly half (47%) say they’re going to permit employees to work from home full time. In a separate confirmation of this trend, 78% of CEOs agree that remote collaboration is here to stay.¹

However, pre-COVID-19, many industries and companies had been reluctant to change to remote staffing models, citing challenges in managing a remote workforce, among other concerns.² Certainly, there are pros and cons to allowing full-time personnel to work from home. However, it seems it took a pandemic to catapult this phenomenon into a feasible platform.

So here we are. As inconvenient as working from home may be for some, work seems to be getting done. What does this mean for shareholders of companies affected by a remote workforce? It all depends on which types of companies we’re talking about. On the one hand, the need for less office space, supplies and equipment offers cost-cutting measures that can improve profit margins. To wit, companies such as Google, Facebook and Twitter have announced they will continue some version of a long-term or permanent work-from-home staffing model in the future.³

On the other hand, businesses that support the normal work-a-day office environment are experiencing a decline in revenues. We’re talking about downtown coffee shops, cafes, dry cleaners, shoe repair shops, gyms, food carts, florists and pharmacies. Some of the “mom-and-pop shops” may have already gone out of business. Commercial real estate has taken a hit.⁴

Looking forward, it may be worth evaluating your investment portfolio to help ensure you have a diversified mix of companies that can profit from remote work staffing, or at least should not be significantly hurt by it. Remember that we are always available to conduct a portfolio review and advise you on ways to adjust to suit your circumstances.

An interesting twist to the remote work model is that it could be a boon for rural America. Small cities and towns have been hard-hit by automation and the offshoring of jobs, plus they tend to recover more slowly from economic downturns. The rising trend for remote workers offers a way to populate and infuse more wealth into rural areas of the country.⁵

¹ Emily Courtney. FlexJobs. Dec. 21, 2020. “Remote Work Statistics: Navigating the New Normal.” https://www.flexjobs.com/blog/post/remote-work-statistics/. Accessed Jan. 11, 2021.

² Nigel Davies. Forbes. March 10, 2020. “This Is Why Employers Are Still Denying Your Remote Working Requests.” https://www.forbes.com/sites/nigeldavies/2020/03/10/this-is-why-employers-are-still-denying-your-remote-working-requests/?sh=1b5031e26bcd. Accessed Jan. 25, 2021.

³ Derek Thompson. The Atlantic. Aug 6, 2020. “The Workforce Is About to Change Dramatically.” https://www.theatlantic.com/ideas/archive/2020/08/just-small-shift-remote-work-could-change-everything/614980/. Accessed Jan. 11, 2021.

⁴ Steve LeVine. Marker. Sept. 1, 2020. “Remote Work Is Killing the Hidden Trillion-Dollar Office Economy.” https://marker.medium.com/remote-work-is-killing-the-hidden-trillion-dollar-office-economy-5800af06b007. Accessed Jan. 11, 2021.

⁵ Alex Wittenberg. Bloomberg. July 23, 2020. “The Economics of Remote Work.” https://www.bloomberg.com/news/articles/2020-07-23/the-effect-of-remote-work-on-america-s-economy. Accessed Jan. 11, 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

Wednesday, February 3, 2021

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.

Monday, February 1, 2021

How to Help Maximize Social Security Benefits

There are good reasons to delay starting Social Security benefits, but there are also good reasons to begin them early. It really does depend on your circumstances.

If you claim earlier than your full retirement age (FRA), your benefit will be permanently reduced. The age to qualify for the full Social Security benefit varies by birth date, not only for beneficiaries, but also for surviving spouses who rely on the primary earner’s benefit:¹

For people born between 1943 and 1954, FRA is age 66.
For people born between 1955 and 1959, FRA ranges from 66 and 2 months to 66 and 10 months.
For people born in 1960 and later, FRA starts at 67.
For surviving spouses born between 1945 and 1956, FRA is age 66.
For surviving spouses born from 1957 to 1961, FRA ranges from 66 and 2 months to 66 and 10 months.
For surviving spouses born in 1962 and later, FRA is 67.

Why would you claim earlier than FRA if your benefit will be reduced? One reason to start them early is if you want to retire early and need Social Security benefits to help cover your expenses. Or, if you want your investments to have a longer time to grow, you may want to begin benefits so you don’t have to draw from your retirement accounts — at least not until you have to take required minimum distributions (RMDs) at age 72.² Taxable brokerage accounts can continue growing without distributions.

However, delaying benefits can have some advantages as well. The main one is that if you wait until FRA, you’ll receive a higher monthly payout by avoiding the permanent reduction in benefits before what would have been your full retirement age. And if you delay beyond FRA, your permanent benefit allows collection credits ranging from 5.5% to 8% (depending on your birth year) up to age 70.³ This may be a good option if you continue working through your 60s and/or have plenty of retirement assets you can start tapping for income when you retire. Also, bear in mind that the longer you wait, the higher the benefit will be for a surviving spouse who will rely on your benefit. The same applies if you have children who would be eligible for benefits.

Obviously, deciding when to start drawing benefits can be a big decision — one that should be determined based on your personal factors, such as your age, income, ability/desire to work, your spouse’s income, your health, your assets, possibly whether or not your mortgage is paid and even the lifestyle you want to enjoy during retirement. We can help you evaluate your entire financial picture to help you make this decision. Feel free to contact one of our experienced advisors.

There are a few more things you should know about spousal benefits. For example, a spouse can receive 50% of the higher-earning spouse’s Social Security benefit or the benefit based on her own work history — whichever is higher. A spouse can apply for benefits based on the primary earner’s work history only after the primary has already claimed benefits. Be aware that spousal benefits are available only after the couple has been married for at least one year. When a couple divorces, the ex-spouse can apply for benefits if the marriage lasted 10 or more years and once they have been divorced for at least two years.⁴

Here are a few other tidbits:⁵

In 2021, the average Social Security beneficiary will collect $1,543, according to the Social Security Administration.
In 2021, the maximum benefit anyone can receive is $3,895, which includes delayed retirement credits up to age 70.
For self-employed people who must pay both the individual and employer Social Security (FICA) tax, the maximum tax in 2021 is $17,707.20.

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 Liz Weston. The Los Angeles Times. Jan. 6, 2021. “For Social Security benefits, playing a waiting game really pays off.” https://www.latimes.com/business/story/2021-01-06/social-security-benefits-waiting-pays-off. Accessed Jan 6, 2021.

² Christy Bieber. DailyJournal. Jan. 6, 2021. “3 Great Reasons to Take Social Security Benefits at 62.” https://dailyjournalonline.com/business/investment/personal-finance/3-great-reasons-to-take-social-security-benefits-at-62/article_2a84328d-4d06-5f4e-9a4d-37b3b7fd8c3c.html. Accessed Jan 6, 2021.

³ Justin Kuepper. Dividend.com. Dec. 11, 2020. “How to Make the Most of Your Social Security Benefits.” https://www.dividend.com/retirement-channel/making-the-most-of-your-social-security-benefits/. Accessed Jan 6, 2021.

⁴ Rachel Hartman. US News & World Report. March 11, 2020. “How to Maximize Social Security With Spousal Benefits.” https://money.usnews.com/money/retirement/social-security/articles/how-to-maximize-social-security-with-spousal-benefits. Accessed Jan 6, 2021.

⁵ Maurie Backman. Mooresville Tribune. Jan. 6, 2021. “5 Essential Social Security Numbers You Need to Know in 2021.” https://mooresvilletribune.com/business/investment/personal-finance/5-essential-social-security-numbers-you-need-to-know-in-2021/article_3d757b8d-d266-537d-89d8-dbeaf3607108.html. Accessed Jan 6, 2021.

Wednesday, January 20, 2021

Global Recovery in a Post-Pandemic World

In 2020, the World Economic Forum published its annual Global Competitiveness Report, as usual. However, in light of the global pandemic, it put its long-standing Global Competitiveness Index rankings on hold. Instead, the report focused on priorities for recovery and revival instead of competition.¹

Indeed, economic globalization over the past two decades, in many ways, seems to have made the world much smaller. The world seems to be more integrated, and some countries rely on each other for supply chain and production capabilities, geopolitical support and shared innovation and technologies.²

Moving past this latest pandemic, it would be beneficial to the world if countries worked together to ensure this virus, and others in the future, are more efficiently contained and do not impact the global economy in the manner in which COVID-19 has. The 2020 World Economic Forum report emphasized four main areas in need of transformation: the environment, human capital, financial markets and the innovation ecosystem.³

These four areas could apply to our own households as well. After all, some of us leaned on each other throughout the pandemic — neighbors shopping for neighbors, checking in on each other, making the extra effort to stay in touch with high-risk individuals to keep their spirits up. And while the country suffered through COVID, we simultaneously experienced the highest number of named storms on record, record levels of wildfires and the hottest day on record (129.9 F in Death Valley, California).⁴

Depending on circumstances, some people’s household finances have been transformed, leaving some with less income and others with more savings. We relied on and appreciated technology to keep us fed, clothed and connected with loved ones and colleagues. During this intervening time of recovery, we should not forget the lessons learned. Feel free to contact us if you are looking for ways to help protect your finances in the wake of future crises — whether global, national or household.

In other parts of the world, the new U.S. administration will likely foster a change in global relationships. The Biden presidency is expected to nurture relations with European countries and approach the China trade war with a more mutually beneficial exchange. Furthermore, as we return to more normal economic fundamentals in the new year, we could see a weaker U.S. dollar that may favor emerging markets in the short term.⁵

The day before Christmas, Great Britain ironed out its long-awaited deal with Europe to move forward with the separation known as Brexit. The new deal promises a rebalance of regulations and other challenges between the two continents, but it does not include any new tariffs or quotas.⁶ The split, which formally begins on Feb. 1, looks like it could make things more difficult for residents of the two regions when it comes to cross-border travel, attending universities, business dealings and job opportunities.⁷

¹ Klaus Schwab and Saadia Zahidi. World Economic Forum. 2020. “How Countries are Performing on the Road to Recovery.” http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2020.pdf. Accessed Dec. 29, 2020.

² Ibid.

³ Saadia Zahidi. World Economic Forum. Dec. 16, 2020. “This is how countries can rebuild competitive economies for people and planet.” https://www.weforum.org/agenda/2020/12/how-countries-can-rebuild-competitive-economies-for-people-and-planet/. Accessed Dec. 29, 2020.

⁴ EcoWatch. Dec. 23, 2020. “The Top 10 Extreme Weather and Climate Events of 2020.” https://www.ecowatch.com/extreme-weather-climate-2020-2649628910.html?rebelltitem=1#rebelltitem1. Accessed Dec. 29, 2020.

⁵ Robert Horrocks. AdvisorPerspectives. Dec. 14, 2020. “CIO Outlook: Tailwinds for Emerging Markets.” https://www.advisorperspectives.com/commentaries/2020/12/14/cio-outlook-tailwinds-for-emerging-markets. Accessed Dec. 29, 2020.

⁶ Bloomberg. Dec. 24, 2020. “In Bullet Points: The Key Terms of the Brexit Deal Analyzed.” https://www.bloomberg.com/news/articles/2020-12-24/in-bullet-points-the-key-terms-of-the-brexit-deal. Accessed Dec. 29, 2020.

⁷ Joe Mayes. Bloomberg | Quint. Dec. 28, 2020. “Not So Fast! What Brexit Means for Border Crossers.” https://www.bloombergquint.com/quicktakes/not-so-fast-what-brexit-means-for-border-crossers-quicktake. Accessed Dec. 29, 2020.

Tuesday, January 12, 2021

2021 Outlook: Wealth Managers Weigh In

While challenges likely still lie ahead, there’s no denying we all weathered our fair share of storms in 2020. Now that the calendar has turned to a new year, we looked to wealth managers across the nation to find out what they’re expecting for 2021. As you’ll see, the answer often changes depending on where you look.

According to its latest 2021 economic outlook, UBS expects widescale availability of the COVID-19 vaccine will increase global output in 2021. The firm anticipates corporate earnings will return to pre-pandemic highs by the end of 2021 and recommends that investors diversify their portfolios by rebalancing out of U.S. large caps and global consumer staples and into global equities and cyclical stocks with catch-up potential.¹

Merrill Lynch anticipates full recovery will take a bit longer. It doesn’t see a complete restoration of growth, innovation and stability until 2022. However, the firm predicts 2021 will see progress, particularly in industries that benefited from the pandemic. It also sees opportunities for sectors in which pent-up demand could soar, such as air travel and hospitality.²

Goldman Sachs has dubbed its projection for a V-shaped recovery the “Vaccine-Shaped Recovery,” reinforcing its outlook now that the vaccine is becoming available. The money manager anticipates economic activity will rebound by this summer, with a ramp-up in depressed sectors such as travel, accommodation and food services. Goldman projects the United States and Europe will end the year with a 2% jump in GDP, while most emerging economies will lag with a somewhat slower recovery.³

JP Morgan Asset Management also predicts a relatively fast rebound thanks to vaccine availability. It warns, however, that job recovery, GDP and inflation are more dependent on policies implemented by the Federal Reserve and the new presidential administration, so they may lag somewhat. Its analysts say U.S. equities already boast high valuations, so investors may find more growth opportunity in international stocks and alternative assets that offer both income and downside protection.⁴

Whether you’re bullish or bearish on the coming recovery, the U.S. economic prospects seem to look much better than they did six months ago. If you’d like a financial review to see if there are ways to better position your assets for the future, please give us a call.

¹ UBS. 2020. “A Year of Renewal.” https://www.ubs.com/us/en/wealth-management/market-news/cio/insights-display-adp/global/en/wealth-management/chief-investment-office/market-insights/2021/year-ahead.html#livestream. Accessed Dec. 17, 2020.

² Merrill Lynch. Dec. 17, 2020. “Outlook 2021: How to Prepare for the Year Ahead.” https://www.ml.com/articles/2021-market-outlook-portfolio-investments.html. Accessed Dec. 17, 2020.

³ Goldman Sachs. Nov. 7, 2020. “V(accine)-Shaped Recovery.” https://www.goldmansachs.com/insights/pages/gs-research/macro-outlook-2021/report.pdf. Accessed Dec. 17, 2020.

⁴ JP Morgan Asset Management. 2020. “The Investment Outlook for 2021.” https://am.jpmorgan.com/content/dam/jpm-am-aem/global/en/insights/market-insights/investment-outlook-2021-us.pdf. Accessed Dec. 17, 2020.

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.

Saturday, January 2, 2021

What's Ahead for the Stock Market?

In November, the Dow experienced its best month since 1987, while the S&P 500 and Nasdaq indexes enjoyed their best month since April of this year.¹

With the election behind us and a vaccine on the horizon, the stock market has plenty to celebrate. Many consumers used the pandemic period to shore up their savings, which bodes well for their prosperity in the coming year. There is a low chance of increased taxes or massive reforms given the divide in Congress, and while interest rates remain low, the home-buying market is poised to soar on renewed consumer confidence. All of these factors may be historically good news for investment markets.²

The stock market increases 82% of the time in the first year of new presidential terms,³ and the S&P 500 has averaged 11.7% returns in the first year of every presidential term since the end of World War II, regardless of party affiliation. Furthermore, the S&P 500 has averaged 15.6% returns with Democratic presidents compared 10% with Republican presidents. Industries like technology, health care, financials and industrials tend to thrive under a Democratic president.⁴

Despite jobs and economic growth taking a hit in 2020, that fortunately wasn’t reflected in the stock market. For more insight on how to plan for the coming year, feel free to reach out to one of our financial advisors for a review.

¹ Matt Egan. CNN. Nov. 30, 2020. “Trump said the stock market would crash if Biden won. The Dow just had its best month since 1987.” https://www.cnn.com/2020/11/30/business/stock-market-dow-jones-trump-biden/index.html. Accessed Nov. 30, 2020.

² Jeremy Siegel. Knowledge@Wharton. Nov. 21, 2020. “Jeremy Siegel: What’s Ahead for the Stock Market?” https://knowledge.wharton.upenn.edu/article/siegel-markets-economy/. Accessed Nov. 30, 2020.

³ Mark Hulbert. Marketwatch. Nov. 28, 2020. “Opinion: Here are your odds that stock prices will be higher at the end of 2021.” https://www.marketwatch.com/story/here-are-your-odds-that-stock-prices-will-be-higher-at-the-end-of-2021-2020-11-24?mod=MW_section_top_stories. Accessed Nov. 30, 2020.

⁴ Savita Subramanian. Merrill Lynch. Oct. 8, 2020. “The Markets and Presidential Elections.” https://www.ml.com/articles/market-volatility-presidential-elections.html#financial-research-and-insights. Accessed Nov. 30, 2020.