Friday Financial Five – June 12, 2015
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Friday, June 12, 2015
Dan Forbes, GoLocalWorcester MINDSETTER™
Bankrate.com ranks retirement destinations
Lists ranking retirement destinations are a part of life now, as the decision of where to live in retirement is so important to the planning process. It should also serve as a wake-up call for states actively seeking to incentivize retirees to spend their money. The most recent list, courtesy of Bankrate.com, has Phoenix at the top and Arizona holding three of the top four spots. The only northeastern location to break the top 40 is Cambridge, Massachusetts. 172 locations are ranked based on taxes, weather, and crime, among other categories.
Student loan refinancing heating up
There had been a student loan freeze for years, forcing student borrowers to assume higher than market interest rates to fund tuition expense. Now, higher income professionals have expanding options for their debt, as private markets are offering to refinance 6 and 7 percent debt for much lower rates. Some of these loans also being securitized as SLABS (Student Loan Asset Based Securities) for investment purposes. As noted in Bloomberg, while this newfound flexibility is great for student borrowers, it will greatly alter government revenue as high interest loans come off the books due to refinancing.
June budget update
If it seems like you’re paying more in taxes, it’s probably because you are. According to the June release of May’s numbers, individual tax receipts are up over 12 percent for first seven months of the fiscal year. Corporate taxes are up over 10 percent. Medicare and Social Security spending are up as part of a 4 percent spending increase. Overall, the deficit is running 16 percent lower than the same time last year.
Older workers face possible employment issues
Instead of stopping work cold turkey, the retirement equation now involves “part-time work” or “going back to work” more than ever. A recent presentation by the U.S. Equal Employment Opportunity Commission details the challenges faced by older workers, especially since the recession of 2008. Unemployment rates for older workers have doubled and the time out of work has lengthened. It’s an important variable for anyone planning to work after the traditional retirement age to consider. For those unable to find work, the unenviable alternative may be a reduced standard of living.
Switzerland to vote on new estate tax
As budgets get revisited at the local level, it’s a reminder that countries can alter their tax base with changes in policy. Switzerland will vote next week on an estate tax measure that may drastically alter their business landscape. The measure would impose 20% tax on inheritances greater than 2 million Swiss francs ($2.2 million) bequeathed directly to children. Opponents point to the detrimental ramifications on family businesses in the country, with some projecting 12,000 people losing their job annually.
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.
Read More About The Economist Grade Here
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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.
Read More About CNBC Ranking Here
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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.
Read More About Forbes Ranking Here
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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.
Read More About ChiefExecutive.net Ranking Here
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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.
Read More About Wallet Hub Ranking Here
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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.
Read More About ALEC Ranking Here
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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.
Read More About Kauffman Foundation Ranking Here
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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.
Read More About Free Enterprise Ranking Here
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