Friday Financial Five – March 1st, 2013
Thursday, February 28, 2013
Rhode Island unemployment under 10%
For the first time in four years, the jobless rate dipped into single digits, hitting 9.9 percent this past December. The employment trend in RI continues to be positive, despite the fear that business expenses, including the new health care law, will continue to increase. The labor force has added roughly five thousand workers since December of 2011.
Sequestration amid a recovery
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIf the last few years have taught us anything, it’s that you can expect the unexpected when it comes to the market recovery. Thus far, the stock market has been able to absorb a debt downgrade, the European crisis, the passing of a national healthcare system that could be vastly more expensive than originally anticipated, and a tax increase earlier this year. Without a last minute resolution, we’ll see if a stabilizing employment and housing environment will be enough to withstand the massive cuts in government spending due to sequestration. From an economic perspective, it will be up to the private sector to pick up the slack.
The ETF-Only 401(k)
The continued prevalence of Exchange Traded Funds (ETFs), the drive to increase employees’ responsibility for their retirement, and the focus to reduce cost of retirement plans has lead to the ETF-only 401(k). Schwab plans on launching one at the end of the year that will be transaction cost free. The more money employees save by reducing their investment costs, the more they’ll save for retirement.
Florida looking to toughen annuity laws
Many Rhode Islanders choose Florida as a retirement destination. The Sunshine State already has some of the toughest laws when it comes to selling annuities to senior citizens, and the state is looking to make them even tougher. Currently, annuity salespeople face a $75,000 fine if they’re found guilty of fraudulent practices to convince seniors to sell investments and purchase an annuity. Due to the success of the bill in reducing consumer complaints, pending legislation would expand protection to all annuity buyers. Other states should adopt this level of protection for the rest of the nation’s seniors.
Another day, another athlete suing his advisor
Mike Tyson is suing his financial firm for $5 million, becoming the latest athlete apparently in need of sound financial guidance. Professional athletes are unlike any other profession. They make huge amounts of money in a short period of time, and most don’t appreciate that those earnings are meant to last a lifetime. They invest poorly and are easily taken advantage of. The leagues need to do a better job weeding out unscrupulous advisors. Agents that steer their clients to advisors convicted of fraud should be just as culpable.
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].
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