Friday Financial Five – February 20th, 2015
Friday, February 20, 2015
More Jobs and More People Looking
The continuation of job gains over 200,000 each month is positive, but an increase in people seeking employment might finally signal the start of a true recovery. January saw another 257,000 increase, coupled with an increase in the unemployment rate to 5.7% as more people are looking for jobs. The thawing job market still doesn’t mean the Federal Reserve will soon raise interest rates for the first time since 2006. The latest meeting’s minutes show many officials favor continuing to hold rates near zero, even with wages also showing signs of growth.
Global Retirement Destination
The 2015 Natixis Global Retirement survey on the best countries for retirement has the United States locked in at 19th for the third year in a row. The survey considers financial components, while also including health and quality of life. Switzerland tops the rankings again, with Iceland and the Netherlands making considerable leaps thanks to improved stability of their respective banking systems. Other notable moves involve Austria dropping from 3rd to 8th, and Japan increasing ten notches to rank 17th.
People Stressing About Money
The American Psychological Association has quantified findings that should not be all that surprising. Their “Stress in America” study finds almost three quarters of Americans feel financial stress part of the time and some are putting health care needs on hold as a result. Stressful retirement conditions may only worsen as more individuals self-fund retirement without traditional pension benefits to count on.
IRA Rollovers Face Pitfalls
IRA holders need to be cognizant of the clarified rollout provision that begins in 2015. Most importantly, individuals only get one indirect rollover per twelve months. For example, an individual that takes a distribution from an IRA has 60 days to put that money back in an IRA account. If that same individual makes a second rollover within twelve months, it might be subject to taxation, a penalty, and the possibility of losing IRA status. Also keep in mind that this applies to all IRA accounts in aggregate.
FAFSA Tip as Deadlines Near
State and federal deadlines approach for completing the Free Application for Federal Student Aid (FAFSA). Filing the FAFSA instructs the Department of Education to share this information with the schools the child intends to attend. It’s important to consider how those institutions are listed. Conventional wisdom says schools give less aid when listed at the top, feeling the preferred choices are listed first on the FAFSA. Avoid this by listing colleges randomly or in alphabetical order.
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].
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