Friday Financial Five – July 3, 2015

Friday, July 03, 2015

Dan Forbes, GoLocalWorcester Contributor

Retirement plans and destinations

401(k) plans and big banks receive plenty of negative publicity, so it’s a change of pace when both are praised in the same context. NARPP identified traditional consumer punching bag, Bank of America, as the company with the best retirement plan out of the 18 they studied. BOA projects that nearly 80% of their plan participants started or increased contributions to the plan last year. In terms of where to retire, LPL is the latest to evaluate all the states based on multiple categories such as financial well-being and healthcare. Based on their internal parameters, Virginia tops the list while New York and New Jersey fill the last two slots.

CFPB publishes 7,700 consumer complaints

The Consumer Financial Protection Bureau exists to alert the public on different issues in the financial industry. The group called out private student loan borrowers for rejecting too many applicants looking to release their co-signer. The CFPB also made public a prodigious list of customer complaints involving bank, mortgage, and credit card issues. As of June 1st of this year, the CFPB has handled a total of 627,000 complaints.

Interest-only loans making a comeback

It’s interesting to see interest-only loans are back, as this type of loan has a thorny history. The goal in planning is to minimize the impact of unforeseen circumstances, maintain steady income sources and avoid dramatic spending increases. Lack of predictability can present an impediment. While the updated underwriting standards are more stringent, borrowers still need to consider possible fluctuations in rates and home values.

Marriage ruling and Social Security

The Supreme Court’s ruling on same-sex marriage last week will have ramifications for Social Security. Married same-sex couples will be eligible for spousal benefits, as well as the various payout options that weren’t previously available, such as file and suspend. Social Security will be subject to an increase in benefit payouts as same-sex spouses take advantage of more flexible options. The combination of increased payouts and continued education of retirees makes updating the entire program imperative.

2015 Financial Stress report

Work can be stressful for all genders and ages but a Financial Finesse survey identified young single mothers as the most stressed out group over finances. 55% of women age 30 to 55 with income below $60,000 and minor children reported “high or overwhelming stress”. On the opposite end of the spectrum, only 7% of males under 30 or over 55 making more than $100,000 felt that level of stress. Overall, 85% of employees reported feeling some level of stress while almost a quarter of respondents feel stress at a high level.

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

Related Slideshow: Massachusetts Business Rankings

See how Massachusetts stacked up.

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WalletHub

Massachusetts has 2015's 28th highest insurance premium penalties for high risk drivers, according to a WalletHub report.

Mass is behind Colorado and New Mexico who come in at 26 and 27 spots respectively while Mass is ahead of Tennessee and the District of Columbia who rank 29 and 30 respectively.

Massachusetts ranks 14th overall in the category of DUI conviction annual premium increase with an amount of $756.

Massachusetts ranks 20th overall in the category of speeding over 20 mph annual premium increase with a total of $261 while ranking 21 overall in the category of two accidents annual premium increase with a total of $1,364.

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WalletHub

Massachusetts has been ranked as the 5th most eco-friendly state in the country, according to a recent study by WalletHub.

Mass ranks tenth in environmental quality and fourth in Eco-Friendly Behaviors landing them in 8th overall.

Mass is behind Minnesota and New York who are in the fourth and third spots respectively, and in front of Washington and New Hampshire who come in at the six and seven spots.

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The Economist

Small Business Friendliness Grade: D+

The Economist grades states on an A+ to F grading scale for its small business climate. Massachusetts ranks near the bottom of the nation, joining New Mexico and New York in receiving D+ grades. 9 states scored worse than a D+ in the Economist rankings.

Overbearing bureaucracy and excessive licensing is stifling small business in America.

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CNBC

#25 CNBC

CNBC ranks each state in cost of doing business, economy, technology and innovation.

Massachusetts' unemployment rate as of May 2014 was 5.6 percent. The state added 9,100 jobs in the month of May.

Forbes

#13 Forbes

Forbes ranks each state in business costs, economic climate, and growth prospects.

The most damning in the commentary:

Massachusetts’ business costs, including labor, energy and taxes, are the highest of the 48 contiguous states—only Hawaii is higher—at 20% above the national average.

ChiefExecutive.net

#47 ChiefExecutive.net

ChiefExecutive.net ranks each state in taxations and regulations, workforce quality, and living environment.

The most damning in the commentary:

Taxation and regulation are always the key barometers. Massachusetts and Oregon are the worst.

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Tax Foundation

#25 Tax Foundation

Tax Foundation ranks each state in corporate tax rank, sales tax rank, and unemployment insurance tax rank.

Massachusetts ranked #49 in unemployment insurance tax.

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Wallet Hub

#10 Wallet Hub

Wallet Hub ranks each state in ROI rank, state tax rank, and overall government services.

Massachusetts ranked #49 in worst roads and bridges, but ranked #7 in overall government services.

ALEC

#41 ALEC

ALEC ranks each state in economic performance and outlook.

Although Massachusetts ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.

Kauffman Foundation

#29 Kauffman Foundation

Kauffman Foundation ranks each state in entrepreneurship.

Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.

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Free Enterprise

#18 Free Enterprise

Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.

Massachusetts's reputation as a hotspot for science and technology endures in this year's rankings. The commonwealth is a center for STEM jobs and university research and development, ranking 4th and 2nd, respectively, in those two categories. It also ranks 6th as a center for high-tech establishments. Massachusetts is taking aggressive steps to bolster economic activity with high-impact university-industry R&D projects and new tools for tech-based startup companies.