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Friday Financial Five – June 3, 2016

Friday, June 03, 2016

 

President Obama looks to expand Social Security benefits

A huge percentage of the country receives the majority of their income from Social Security. President Obama, who in the past has acknowledged how underfunded the program is, recently suggested benefits should increase. To fund expanded benefits, he suggested the wealthy would pay more into the program, a staple of the Democratic presidential candidates’ platforms. The president has supported lifting the income cap that’s subject to Social Security taxes in the past, but that was to provide additional funding to the program, not expand the payment of benefits.

ECB leaves interest rates alone

The European Central Bank continued a negative interest rate environment while awaiting Britain’s referendum on the Euro. The decision could go either way and the result will determine the future course of action for the rest of the ECB’s participants. President Draghi of the ECB was cautiously optimistic that conditions are improving but stated there may be further stimulus needed to meet an inflation target of just under two percent.

Student debt lingering for millennials    

The Plan Sponsor Council of America (PSCA) examined student loan debt as a barrier to retirement savings for millennials in the workforce. Its estimated that seventy percent of students are borrowing money to finance their education, an increase from half of students who borrowed twenty years prior. Over a third of the study’s respondents stated that their student loan debt presented a “moderate” or “high” barrier to saving for retirement. While many companies offer tuition reimbursement for workers, very few assist directly in loan repayment plans.

Chamber of Commerce fighting overtime changes

The United States Chamber of Commerce, with support from local chambers across the nation, is fighting the changes recently imposed by the Department of Labor. With the new rule, the threshold for salaried employees to receive overtime pay for working more than 40 hours will increase from $23,660 to $47,476, effective December 1st of this year. Beginning January 1st of 2020, those levels will occur every three years. According to the U.S. Chamber, this will result in salaried workers being moved to hourly and a reduction in health and retirement benefits. The Chamber is advocating that Congress stop the rule’s implementation and allow further study of its ramifications.

Friendly cities to start a new business

As the Chamber fights on behalf of small business owners, the list of major cities that make it easier to start a business is the subject of an analysis by Wallethub. Sioux Falls tops the list and Grand Rapids comes in second as both capitalize on solid “costs” and “business environment” scores. Boston is the top city in the northeast, placing fourteenth overall. Texas has six spots in the top twenty-three. Providence finished 149th out of a possible 150.

Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. 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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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.

Read More About Tax Foundation 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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The Pew Charitable Trusts

#45 The Pew Charitable Trusts

The Pew Charitable Trusts ranks each state in job growth and job creation.

Massachusetts added 38,368 jobs in 2014.

Read More About The Pew Charitable Trusts Ranking Here

 
 

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