Friday Financial Five – May 22, 2015

Friday, May 22, 2015

Dan Forbes, GoLocalWorcester MINDSETTER™

Message resonating on Social Security delay

Instead of taking Social Security benefits as early as possible, word is spreading that delaying the receipt of benefits is often beneficial for retirees over time. There’s a movement to educate retirees on this strategy and it’s the new darling of the financial services arena. In 1996, over half of recipients took benefits at the earliest date possible. By 2013, less than forty percent claimed payments when turning 62. Of course, increased awareness might be the straw that leads to dramatic overhaul of a system that isn’t prepared for more intelligent analysis of withdrawal options.

Several auto makers face airbag recall

The Department of Transportation announced a recall for vehicles with Tanaka made airbags. It affects an estimated 34 million vehicles, including cars made by BMW, Chrysler, Daimler Trucks, Ford, GM, Honda, Mazda, Mitsubishi, Nissan, Subaru, and Toyota. The website allows owners to enter the Vehicle Identification Number (VIN) to check on their specific auto, with Honda expected to be the maker most affected.

Inflation expected to still be held in check

The Friday CPI report is expected to show an overall decline in inflation through April, according to Bloomberg. Core CPI is expected to come in at 1.7 percent, but this removes the all-important fluctuating costs of food and energy. Bloomberg also sites a lack of momentum for the most recent sale of Treasury Inflation Protected Securities (TIPS), investments that benefit from higher inflation.

New deadline from DOL on fiduciary ruling

The Department of Labor has extended the communications on the fiduciary rule by 15 days. The new comment period, after pressure from the financial industry, will now move from July 6th. In the meantime, there have been several more cases of advisory fraud making national news and indications that wirehouses are losing advisors. According to Investment News, these wirehouses, including Merrill Lynch and UBS, have lost roughly 11% of their workforce since the first quarter of 2009.

Financial planning at age 40

The fortieth birthday represents a milestone, along with the aches and pains that come with it. It’s also almost the midway point for the traditional working life and accumulation phase, assuming a retirement age between 65 and 70. It’s a good time to assess asset levels, investment strategy, spending habits, retirement destination, and longevity. It’s not enough to just calculate X that’s been accumulated and hope to reach a random number Y by retirement. A more relevant calculation starts with projected spending at retirement, allowing workers to back into the nest egg required to supplement pensions and Social Security income.

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.

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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.

Prev Next

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.