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Friday Financial Five – April 4th, 2014

Friday, April 04, 2014

 

High frequency trading gets more exposure

While other problems exist in the financial services industry, high frequency trading should be the priority for the SEC. The practice doesn’t pass the smell test, and the recent 60 Minutes piece with Michael Lewis does a good job of explaining the nuances. An argument exists that high frequency trading hasn’t been a focus because it doesn’t greatly harm any individual investor. Instead, it harms millions of investors in extremely small increments and violates the concept of fair trade. The SEC can put an end to this activity or at least dissuade it, possibly with a minimum time between trades or a trade tax. The goal should not be to stifle technological advancement but to create a level playing field between buyer and seller.

401(k) auto-enrollment helping retirement savings

While participation in the stock market is at a low, it appears those making 401(k) contributions is increasing. Auto-enrollment certainly has played a role, as the number of Merrill Lynch 401(k) sponsors using this practice increased by 16 percent in 2013. Merrill also saw a 25 percent increase in those opting for annual contribution increases. Many retirement plans participants adapt to the “forced” contribution and increase, then budgeting based on the remaining take home pay.

Social Security for public-sector workers

Government employees who have contributed to Social Security should really examine their benefits to ensure proper projected retirement income. WEP (Windfall Elimination Provision) rules and the Government Pension Offset can both reduce estimated benefits. The WEP reduction is maximized at one-half of the pension. The Government Offset factors into spousal and survivor benefits and can amount to two-thirds of the pension. Those in public service must be mindful of these provisions to properly forecast retirement income.

The cost of Alzheimer’s

A recent program by the Alzheimer’s Association highlighted the immediate need to address this not only as an obvious health issue, but to mitigate the overwhelming cost associated with caring for those affected. Alzheimer’s is the most expensive condition in the nation, costing $214 billion in 2014 and expected to climb to over $1 trillion by 2050. It accounts for 20% of all Medicare expense, with a total of $150 billion spent by Medicare and Medicaid combined. Out of pocket spending accounts for over $30 billion. This ailment may single-handedly threaten the sustainability of the entitlement programs, while simultaneously driving up the cost of Long Term Care coverage to prohibitive levels.

Madoff trustee looking for approval on another payout

It’s been over 5 years since Bernie Madoff’s investment firm failed. If approved by a bankruptcy judge, the most recent settlement agreement would bring total payouts to defrauded investors to almost $6 billion. Irving Picard, the trustee, most recently is looking for permission to pay out close to $350 million, the bulk of which comes as a settlement with JP Morgan Chase. Mr Picard’s legal team is not working pro-bono, as their recently submitted request for $39 million in fees would swell the total legal bill for this debacle to over $500 million.

Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected] .

 

Related Slideshow: 2014 Auto Insurance Rates in Central MA

Using a defined set of criteria, GoLocal utilized the Auto Insurance Premium Comparison tool from the Massachusetts Office of Consumer Affairs and Business Regulation to compile and rank the cities and towns of Central Massachusetts with the highest auto insurance premiums - lowest to highest. 

The Criteria

Vehicle: 2008 Honda Civic LX

Policy: Single Vehicle, Single Operator Licensed 14 Years  

Driving Record/Behaviors:

  • Driver Licensed in Massachusetts: Yes
  • Date of last accident or traffic violation: 5 years ago
  • Days lapse in coverage during the previous 3 years: None
  • Commutes to work: Yes
  • Annual miles vehicle driven in past year: 15,000
  • Years at current residence: 2
  • Years with current agent: 3
  • Years with current company: 2
  • Discrepancies on Application: 0 
  • Subscriber to a Roadside Assitance Organization: No
  • Policy Eligible for a Group Discount: No
  • Premium paid in full at inception: No
  • Companion insurance products purchased: None
Coverage:
  • $20,000/$40,000 Bodily Injury Liability
  • $20,000/$40,000 Uninsured Motorists
  • $20,000/$40,000 Underinsured Motorist
  • $25,000 Property Damage Liability
  • $8,000 Personal Injury Protection ($0 deductible)  

Prev Next

71. Templeton

Highest Premium: $602.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

70. Upton

Highest Premium: $620.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

69. New Braintree

Highest Premium: $620.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

68. Millville

Highest Premium: $640.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

67. Hubbardston

Highest Premium: $640.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

66. Holland

Highest Premium: $640.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

65. West Boylston

Highest Premium: $640.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

64. Ashby

Highest Premium: $642.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

63. Westminster

Highest Premium: $651.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

62. Lunenburg

Highest Premium: $653.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

61. Townsend

Highest Premium: $655.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

60. Northborough

Highest Premium: $659.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

59. Orange

Highest Premium: $663.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

58.East Brookfield

Highest Premium: $663.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

57. Barre

Highest Premium: $663.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

56. Warren

Highest Premium: $663.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

55. Ware

Highest Premium: $663.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

54. Winchendon

Highest Premium: $666.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

53. Petersham

Highest Premium: $671.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

52. Sterling

Highest Premium: $672.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

51. Brimfield

Highest Premium: $679.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

50. Ashburnham

Highest Premium: $687.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

49. North Brookfield

Highest Premium: $692.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

48. Shirley

Highest Premium: $693.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

47. Brookfield

Highest Premium: $693.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

46. Uxbridge

Highest Premium: $698.00
 
Lowest: $217.00
 
All premiums reflect rates effective on 1/1/14
Prev Next

45. Northbridge

Highest Premium: $698.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

44. Gardner

Highest Premium: $698.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

43. Ayer

Highest Premium: $698.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

42. Athol

Highest Premium: $698.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

41. Sturbridge

Highest Premium: $702.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

40. Topsfield

Highest Premium: $702.00
 
Lowest: $291.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

39. Charlton

Highest Premium: $703.00
 
Lowest: $291.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

38. Sutton

Highest Premium: $704.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

37. Hopkinton

Highest Premium: $705.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

36. Oakham

Highest Premium: $705.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

35. Hudson

Highest Premium: $705.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

34. Douglas

Highest Premium: $706.00
 
Lowest: $268.00
 
All premiums reflect rates effective on 1/1/14
Prev Next

33. Harvard

Highest Premium: $707.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

32. West Brookfield

Highest Premium: $708.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

31. Paxton

Highest Premium: $714.00
 
Lowest: $300.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

30. Boylston

Highest Premium: $716.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

29. Bolton

Highest Premium: $719.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

28. Dudley

Highest Premium: $719.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

27. Palmer

Highest Premium: $719.00
 
Lowest: $291.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

26. Royalston

Highest Premium: $721.00
 
Lowest: $234.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

25. Oxford

Highest Premium: $727.00
 
Lowest: $300.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

24. Westborough

Highest Premium: $728.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

23. Millbury

Highest Premium: $744.00
 
Lowest: $291.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

22. Hardwick

Highest Premium: $746.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

21. Milford

Highest Premium: $746.00
 
Lowest: $300.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

20. Marlborough

Highest Premium: $746.00
 
Lowest: $300.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

19. Leominster

Highest Premium: $746.00
 
Lowest: $300.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

18. Clinton

Highest Premium: $746.00
 
Lowest: $310.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

17. Auburn

Highest Premium: $746.00
 
Lowest: $310.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

16. Hopedale

Highest Premium: $749.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

15. Lancaster

Highest Premium: $755.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

14. Southbridge

Highest Premium: $759.00
 
Lowest: $310.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

13. Rutland

Highest Premium: $766.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

12. Fitchburg

Highest Premium: $770.00
 
Lowest: $332.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

11. Princeton

Highest Premium: $773.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

10. Holden

 
Highest Premium: $773.00
 
Lowest: $276.00
 
All premiums reflect rates effective on 1/1/14
Prev Next

9. Leicester

Highest Premium: $773.00
 
Lowest: $332.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

8. Mendon

Highest Premium: $779.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

7. Southborough

Highest Premium: $780.00
 
Lowest: $217.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

6. Webster

Highest Premium: $786.00
 
Lowest: $332.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

5. Spencer

Highest Premium: $805.00
 
Lowest: $310.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

4. Blackstone

Highest Premium: $829.00
 
Lowest: $268.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

3. Grafton

Highest Premium: $850.00
 
Lowest: $276.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

2. Shrewsbury 

Highest Premium: $865.00
 
Lowest: $300.00
 
 
All premiums reflect rates effective on 1/1/14
Prev Next

1. Worcester

Highest Premium: $997.00
 
Lowest: $440.00
 
 
All premiums reflect rates effective on 1/1/14
 
 

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