March is National Nutrition Month!

This dedicated span of time encourages us to spotlight the significance of nutrition and healthy eating, recognizing this as a core pillar to both mental and physical well-being. I’m excited to dive into a topic that holds a special place in my heart – metabolic health. See below an introduction, as we explore how choices we make in dietary habits play a crucial role in shaping metabolic well-being – and what that even means!

The human body is intricately detailed and complex, similar to a car. While many of us don’t comprehend a car’s inner workings, we can sense when something is “off” and impacting optimal functionality. Similarly to a check engine light flipped on, there are many cues the body gives that it’s utilizing food for fuel less than optimally, such as the following: cravings, weight struggles, energy slumps, relentless fatigue, etc. Sadly, many of us have ignored these signals for too long.

The engine of the car is likened to the body’s metabolism. Just as the engine converts fuel into usable energy so the car can operate, being in good metabolic health ensures our body is able to generate and process energy efficiently to sustain life.

What factors determine metabolic health, you may wonder?

Clinically, it hinges on five specific and measurable factors¹:

1. Abdominal obesity (>40” around waist in men, >35” around waist in women)
2. Impaired fasted blood sugar (100 mg/dL or higher)
3. High blood pressure (130/85 mm/Hg or higher on multiple occasions or on medication for high levels)
4. High triglycerides (type of fat; 150 mg/dL or greater or on medication for high levels)
5. Low “helpful” cholesterol (HDL) levels (<40 mg/dL for men, <50 mg/dL for women)

According to the recent study published in the Journal of American College of Cardiology in July 2022, it’s estimated that only ~7% of adult Americans adults have optimal metabolic health, leaving 93% with markers in unhealthy ranges².

Each marker out of range increases the risk for development of complications like heart disease, Type 2 Diabetes, or stroke. Three or more out of range is considered metabolic syndrome. Getting an annual physical exam and bloodwork empowers your healthcare provider to evaluate your risk for metabolic syndrome. The good news is that lifestyle choices highly influence the health of these markers – namely eating a balanced diet and shunning a sedentary existence as two very practical realms to target.

Balanced Diet

Nutritionally, a balanced diet revolves around diverse, nutrient-rich whole foods while limiting processed items. A simple example of this would be choosing an apple (whole form) as opposed to apple sauce or apple juice, as often as is doable. This is due to the quality of nutrients the whole form contains as opposed to added processing.

When it comes to energy, the body’s preferred fuel source is glucose (think of this like gasoline), which comes from eating carbohydrates (carbs). In simplest terms, when we eat foods containing carbs, our blood sugars rise (as we expect). In those with good metabolic health, the body efficiently takes that glucose and converts it into usable energy and blood sugar levels are returned to normal through a process of hormonal “checks and balances”.

Conversely, poor metabolic health impedes glucose being used for energy efficiently, but rather leaves it in the blood stream, hence the term “high blood sugar”. When levels are high in the moment, you may experience the check engine symptoms listed above. Over time, chronically elevated blood sugar levels can lead to conditions like Type 2 Diabetes. When it comes to managing blood sugar levels – a quick tip you can implement today is the principle of “no naked carbs”.

No Naked Carbs

Clothing your carbs so they’re not “naked” means simply to pair a carb food with a protein or fat source to promote a steadier blood sugar response and limit a “spike” which may result from eating a carb only. Some examples would be peanut butter with a banana, cheese with crackers, or a hard boiled egg with grapes. This is just one simple tip to promote keeping your “engine” in tip-top shape, which will keep your body operating more efficiently in the moment and the long haul.

Sedentary Lifestyle

A sedentary lifestyle can be described as one marked by excessive sitting, lying down, and not engaging intentionally in physical activities that would increase heart rate or test muscle tone. For many Americans, especially depending on time of year and where one lives, this can include commute time to work, working from home sitting in front of a computer for most of the day, television watching, video game playing, etc.

Lack of movement, especially after eating food, can be disadvantageous for metabolic health as it can promote an “insulin resistant” state. Movement, like exercise (as simple as walking at a brisk pace or weight lifting) can promote “insulin sensitivity” which allows the body to utilize the incoming sources of foods more efficiently. The U.S. Department of Health and Human Services recommends the American adult to engage in physical activity categorized as moderate-intensity of 150 minutes per week and optimally 2 days of muscle strengthening, also³. This helps not only with metabolic health, but weight maintenance, mood, increasing “helpful” cholesterol (HDL), increasing creativity and promoting longevity, among many other benefits.

No matter where your starting point is, it’s time to get moving!

Let’s get your engine in check!

This introductory overview offers a flyover look into the intricacies of metabolic health, distinguishing between manifestations and potential risks. I hope you are encouraged that lifestyle factors like what you eat (good nutrition) and how much you move (exercise) can greatly reduce your risk for chronic disease, keeping your “engine” operating efficiently. By fostering awareness of the importance of metabolic health, we can be proactive in our approach to reducing risk factors. Time to take a look “under the hood” of your car!

Many companies offer equity compensation programs to attract, motivate, and retain top talent while conserving cash and aligning the interests of the employees and shareholders. While these incentive programs provide a great benefit, they must be carefully managed to avoid upsetting your financial strategy or posing a significant tax burden. Below we discuss two of the most common stock option plans that we help our clients understand and maximize.

RSU – Restricted Stock Units

As an employee, you may receive a Restricted Stock Unit (RSU) grant as part of your annual performance assessment or generally as part of your overall compensation package. The majority of RSUs have a vesting schedule, so you don’t receive the full value from the outset (Your employer wants to schedule vesting over a period, rather than all at once, to retain your services!). For example, if your company grants you 400 RSUs, you’ll probably get 100 shares to vest each year (typically on a quarterly schedule) until you vest all 400 shares, at which time you may receive a new grant.

RSUs give you an interest in the company but no actual value until they are vested. Upon vesting, the Fair Market Value (FMV) of the shares is considered income. You will then have the right to sell the vested shares and receive the cash proceeds or hold the shares for a longer period.

Regarding Taxes

Your income will include the FMV of the shares as they vest. You can sell your vested shares and convert them to cash. Alternatively, you may keep the shares, but any gains made after the vesting date would be taxed as capital gains when you sell. If you hold shares and they drop in value, you might be faced with selling those shares at a loss, while paying tax on vesting date FMV you never actually received.

Your employer typically handles your tax withholding at the vesting date by selling enough shares on your behalf to cover the estimated tax liability and distributing the remainder to you. The IRS requires a statutory 22% withholding rate. Because your vested RSUs influence your taxable income, and effective tax bracket, your employer’s tax withholding rate may not be enough.

Strategy

RSUs accrue over time and, if held, can lead to a significantly consolidated position in one firm. An experienced executive might start with 100 shares vested, then 200, then 300, and so on. Suddenly, they discover that a sizable chunk of their holdings, perhaps also a significant percentage of their net worth, consists of company stock.

Accumulation of company stock can lead to more than just lack of portfolio diversification. Generally, having a sizable stock position in the same company that also pays your salary isn’t advisable. If that organization, for a myriad of reasons, experiences a downturn this could have a double-whammy effect.

As a result, it may be advisable to sell all RSUs as they vest. There should be no additional taxes owed, because your costs basis will be the FMV at which you received the stock. In fact, keeping RSUs as they vest is the exact same thing as taking each cash bonus and investing it 100% in your company stock. If you wouldn’t do that, you shouldn’t hold all of your RSUs. By converting the shares to cash you will be better able to manage taxes due and invest proceeds in a more diverse manner. This should provide you with greater and more predictable long-term success.

Why the ‘Last Dance’ was about more than just sports…

Over a five-week period in April and May, millions of people tuned in to watch the ESPN docuseries, “The Last Dance”, about Michael Jordan and the 1990s Chicago Bulls dynasty. Whether it’s the lack of live sports and entertainment in a COVID-19 world or the never-ending admiration people have for Michael Jordan, everyone was talking about the series. Basketball fan or not, it was an incredible story that people of all ages and backgrounds will enjoy.

Spoiler alert: Michael Jordan and the Chicago Bulls won six NBA championships during the 1990s, twice winning three in a row, and went down in history as one of the best sports dynasties in history. Michael Jordan will forever be part of the debate for greatest of all time and Dennis Rodman will be remembered for his wild tendencies. Most of us knew all of this before watching a single episode of the series and yet something about it captured the attention of millions. Every episode was about so much more than just sports.

I would argue that everyone who watched, either consciously or sub-consciously, took something away from it. Here are a few of the lessons that we walked away with:

PATIENCE IS REQUIRED

The age of technology is creating an issue across all generations, especially the younger ones. Yes, we are guilty of this also. Technology has created a society where people look for and need instant gratification. The problem is that becoming an overnight success or getting rich quick shouldn’t be expected and is highly unlikely. Michael Jordan, arguably the greatest basketball player ever, didn’t have overnight success so why should we expect it? He may have been known as a great basketball player, but that doesn’t mean he immediately started winning championships. As many of us have heard, he was even cut from his high school basketball team.

We shouldn’t mistake patience for complacency either. Exhibiting patience by sitting back while the word keeps turning won’t bring success. Hard work is always required, but don’t expect results overnight. Success can be a slow grind and is different for each and every individual based on their circumstances.

MAKE THE COMMITMENT

The 1990s Chicago Bulls made a commitment to win. They had a clear goal to win a championship and made the commitment to do whatever it would take to win. It’s easy to make a lofty goal, but it’s difficult to commit to the amount of work needed to achieve that goal. There were numerous interviews during “The Last Dance” where someone mentioned the amount of time and thought that Michael Jordan put in to his craft. Michael Jordan’s commitment to the Bulls organization, his family, and himself was always something to be admired. For most people, there isn’t a better example of commitment than his infamous “flu game” where he scored 38 points while being exhausted from flu-like symptoms.

He also acted as a leader by pushing this commitment on to his team. His leadership style was criticized at times, but the results speak for themselves. Did his commitment and leadership style come across as ruthless? At times. Whether this leadership style would work in other environments is a debate for another day, but what can’t be debated is how he was able to make his entire team as committed as he was. As Jordan said in “The Last Dance”, “winning has a price and leadership has a price”. Jordan later said “I never asked a teammate to do something that I am not currently doing”.

IT TAKES A TEAM

Michael Jordan may have been the star of the show, but he couldn’t have done it by himself. There were so many people that had a part in the dynasty it would be hard to list them all. From Phil Jackson and Scottie Pippen to Steve Kerr and Scott Burrell, they all had their role. We’ve seen time and time again situations where a superstar doesn’t have the right cast of supporting characters around him or her and struggles to have success. This doesn’t always mean that it needs to be the most talented team either. We’ve also seen situations where the most talented group isn’t the best team.

How do we relate this to life and business? If you want to have success in your personal or professional life surround yourself with the people that will help you succeed. Find your “coach” in Phil Jackson, find your right-hand man in Scottie Pippen, and find the teammate you can trust in Steve Kerr. Without the right team it will be difficult to succeed.

“The Last Dance” was an incredible documentary and one that everyone should watch. Even if you are watching purely for enjoyment try to find a few lessons that you can apply to your life. As Michael Jordan said at the end of the docuseries, “all you needed was one little match to start the whole fire”. Find that match in your own life.

Wealth Managers | Confluence Financial Partners

Bear Markets – Did You Know?

If you’ve watched the news or browsed the web at all recently, no doubt you have seen the term “Bear Market” quite frequently. This term is often used when the worlds’ stock markets go through difficult periods, but what does it mean? And what should investors do about it? Here are five points to consider that will hopefully offer you perspective and confidence:

1. What is a Bear Market? A bear market is generally defined as a stock market decline of at least 20%. The recent market decline (S&P 500) we’ve experienced in 2020 went from the peak in February to the trough in March of -34%.
2. How often do bear markets occur? Since 1949, the S&P 500 has experienced 10 declines of at least 20%, or one every 7 years on average.
3. How long do they typically last?  Since 1949, the average bear market has lasted about 14 months. The average bear market total return was -33%.
4. Bull vs. Bear – Good News! Since 1949, the average bull market has lasted nearly 5 times as long as the average bear market. The average bull market lasted about 71 months and had an average total return of 263% over that time period.
5. A $10,000 hypothetical investment in the S&P 500 in 1980 (with dividends being reinvested) would have grown to more than $870,000 by the end of 2019. During that time period, the investor would have experienced 4 bear markets, 20 market corrections of 10% or more, and 5 recessions.

Key Takeaway: As difficult and unsettling as bear markets can be, it is important to understand that we “earn” the bull markets by being disciplined and patient during the bear markets. The reason that equities can make relatively high returns over time is that those returns are unpredictable in the short-term.

Sources: Capital Group, RIMES, Standard & Poor’s, 2020; MFS Market Insights, 2020; Vanguard Understanding market downturns, 2020; JP Morgan Guide to Markets, 2020.

Traditional 401(k) vs. Roth 401(k)

Retirement plans can be confusing – we know! The decision of whether to contribute to a Traditional 401(k) or a Roth 401(k) is one that many people have or will encounter at some point in their lives. Although these two types of retirement accounts are very similar, they also have key differences. As more and more employers begin to offer a Roth 401(k) option, you should make sure that you have an understanding of each so that you can make the most informed decision possible.

What is the difference?

The main difference between a Traditional or Pre-Tax 401(k) and a Roth 401(k) is the tax impact. With a Traditional 401(k), you receive a tax benefit for your contribution now, but are taxed on the withdrawals later. A Roth 401(k), however, does not provide a tax benefit now. As a result of paying tax on your contribution now, the Roth option allows for tax-free withdrawals later.

Here is a quick example to help explain the tax difference between the two options. This year, if you contribute $10,000 to a Traditional 401(k) and were taxed at a fictional rate of 15% (this would depend on your tax bracket) the $10,000 contribution would decrease your current year taxes by $1,500. If you contributed $10,000 to a Roth 401(k) instead, there would be no reduction to your current year taxes. If we fast forward to retirement and assume the $10,000 contribution is now worth $50,000, there will again be a difference between the two upon withdrawal. If you made a withdrawal of the entire $50,000, the full $50,000 would be taxed at your retirement tax rate with a Traditional 401(k), but the entire $50,000 would be withdrawn tax-free if it were originally invested in a Roth 401(k).

As you can see, the current tax benefit is greater with the Traditional 401(k), but the future tax benefits are better upon withdrawal from a Roth 401(k). One other item to note is that these facts hold no matter what the withdrawal amount is. No matter the amount, a withdrawal from a Traditional 401(k) is generally all taxable and a withdrawal from a Roth 401(k) is generally tax-free.

Which is right for you?

Unfortunately, the answer is that it depends. The primary question to ask yourself is: will my tax rate now or during retirement be higher? If you are in the beginning of your career or expect your income during retirement to be more than it is today, a Roth 401(k) may be right for you. If you believe your tax rate now is going to be higher than what it will be during retirement, then a Traditional 401(k) may be the best option for you.

Another advantage of the Roth 401(k) is that in addition to your original contribution, the growth of the account can be withdrawn tax-free! This is not the case with a Traditional 401(k). Also, if your employer provides a contribution match, you would need to pay tax on this portion of your account at the time of withdrawal whether you use a Traditional or Roth 401(k) as it is a pre-tax contribution.

Other considerations

There are several other differences between the Traditional and Roth 401(k) options that you may want to consider.

• Required minimum distributions (RMDs) – Beginning at age 72, there are required minimum distributions from both 401(k) options unless you are still working. However, a Roth 401(k) could be rolled over to a Roth IRA. Unlike Traditional IRAs, Roth IRAs do not have required minimum distributions.
• Estate planning – Inheriting a Roth retirement account is more beneficial to your heirs than a Traditional account. This is because they would generally not have to pay tax on distributions from the inherited Roth account, whereas they would have to pay tax on distributions from the Traditional.
• Law changes – Just as we can’t predict what your future tax rate will look like we also can’t predict law changes that could occur. Any law changes during your lifetime could change the results of this decision for yourself or your heirs. For example, the recent SECURE Act pushed back RMDs from age 70 ½ to age 72. It also requires an inherited IRA to be distributed within 10 years of inheritance rather than over the beneficiary’s lifetime. This could be a reason to contribute to both a Traditional and a Roth 401(k) to give yourself tax diversification across different accounts. Many employers will allow you to split your contributions between the two.

Conclusion

In summary, there is no easy answer to what type of 401(k) option is better. The decision will depend on your individual circumstances and most likely will change throughout your life. Using the information above should hopefully give you a good starting point to be able to make the most informed decision possible.

Please don’t hesitate to reach out to us if you would like to discuss further!

401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Roth 401(k) plans are long-term retirement savings vehicles. Contributions to a Roth 401(k) are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Unlike Roth IRAs, Roth 401(k) participants are subject to required minimum distributions at age 72. RMD’s are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation.

Any opinions are those of Gregory Weimer and Chuck Ziants and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Expressions of opinion are as of this date and are subject to change without notice. You should discuss any tax or legal matters with the appropriate professional.

Make Lasting Memories by Savoring Life’s Simple Joys

While extravagant vacations are great, you don’t need to spend a lot of money to make meaningful memories with your loved ones. A slow morning on the first day of summer. Baking cookies with the littles. A great meal surrounded by close friends or family. The best memories come in all shapes and sizes, both planned and unplanned. And while there’s nothing like going on that vacation you’ve been looking forward to for months, sometimes it’s the small, unexpected delights that stay with us the longest.

So how can you lead a life with more moments worth savoring? Here are a few tips to help you get started.

Focus on the Little Things

There’s nothing wrong with a bucket list full of exotic travel destinations or goals to buy that yacht or plan a big family reunion. After all, helping you work toward those goals is what a well-planned life is all about. Still, that’s usually not our day-to-day life. There are so many moments in between those grander experiences that are opportunities to explore smaller joys that, when added together, can be just as memorable or fulfilling as a big trip.

Start by picturing your perfect day. What do you do or eat? Who and what do you see? Perhaps it’s reading a book, listening to music or getting outside. Maybe you want to spend more time with close friends. After thinking it over, consider how to bring a few of those elements into your regular routine.

For example, maybe you want to get outside and see one of your friends more often. Consider putting a weekly date on the calendar with them to go for a walk, helping you fulfill both goals. Or perhaps you want to spend more time with your grandkids and also do more at-home cooking. Can the kids help? It could turn into an opportunity to not only spend time together, but for you to share some of your skills and insights with the next generation – doing something as simple as making a pizza.

When trying to find ways to bring the whole family together, consider what everyone is most interested in. Do your kids or grandkids have favorite activities you can do together? Maybe it’s going to an escape room or planning a watch party for their favorite show. Better yet, take turns choosing the plans for a monthly get-together. Experiences are a great way to connect and they make excellent gifts, too.

Commit to Unplugging

Social media has given us unprecedented access to loved ones near and far, and it’s made it easier than ever to share our lives (for better or for worse). But while it makes capturing a moment so easy, social media can also put extra pressure on ourselves and our experiences to be and look perfect – making it that much harder to cultivate and cherish authentic memories.

Moreover, according to Psychology Today, the average American has five social media accounts and spends an hour and 20 minutes each day browsing their feeds. That’s more than 37 hours every month! Imagine the memories we could create over a year with that time.

If you’ve found yourself getting sucked into social media, consider taking a break or limiting the time you spend scrolling. Time management apps and new settings on phones allow you to set timers so you receive an alert when you’ve gone over your allotted time on specific apps.

Learn to Be Present

It’s hard to fully take in a great moment when we’re distracted, whether by our never-ending to-do list or our phone. Learning how to quiet our mind for even short periods of time can leave us open for moments of serendipity and spontaneity. Perhaps you run into a friend at the grocery store and decide to catch up over lunch, or spot a bed of flowers in full bloom while on a walk – both things you may have missed while checking your phone or worrying over all the errands on your list.

Meditation has been proven to help reduce stress and anxiety while improving our concentration. And with several popular apps out there with guided meditations, it’s never been easier to give it a try. While some require subscriptions, most offer a free trial so you can see how you like it before making a commitment.

Enjoy the Moments Worth Living For

Living for the moment is all about applying that stop-and-smell-the-roses mindset to your daily life. That way, even when you aren’t cruising the Mediterranean or celebrating your birthday with a bash, you might just stumble upon a few more exciting moments and soak up some extra memories along the way.

Sources: Psychology Today; Huffington Post

Raymond James is not affiliated with any organizations mentioned.

Family and Life Events

June 26, 2019