Friday Financial Five – January 30th, 2015
Friday, January 30, 2015
Employment Report Shows Continued Positivity
Employment numbers again looked positive, with an unemployment rate for December of 5.6%. Jobless claims have fallen to the lowest level since 2000. There are also indications that an increased percentage of employment changes are employee driven, which might lead to wage growth as workers mobilize in search of higher paychecks. Some areas of the country are still lagging, as the West’s 6.3 percent leads the country. The District of Columbia, California, and Mississippi are all at rates of 7 percent or greater.
IBM Continues to Get Battered
Global employer, IBM, made news this month when word leaked that the company might reduce employee count by 100,000. The company came out publicly refuting the report, affirming there would be a small layoff as part of a “rebalancing”, with laid-off positions being replaced. According to Forbes, there is evidence that multiple layoffs are taking place, and the stock has seen a drop from its 52 week high.
529 Plans May Face Tax Benefit Reduction
Many people saving for college opt for a 529 plan, which currently offers a favorable tax treatment for funds withdrawn to pay for qualified educational expenses. The White House feels it disproportionately favors the wealthy and is actively looking to reduce this benefit. Any change would be coupled with the expansion of the American Opportunity Tax Credit, which is subject to income limits for couples and singles. The government would also like to eliminate the student loan interest deduction for new borrowers.
Millennials Want a Shift in Corporate Mentality
Millennials, or Generation Y’ers, are those that reached young adulthood around the turn of the century. Deloitte’s 2015 Millennial Survey attempts to quantify the changing perspective of the international business community’s younger members. There’s a clear differentiation from what’s considered traditional corporate thinking, as Millennials are more concerned with a company’s societal impact and less focused on the bottom line. Just over a quarter of this group feels their skills are being adequately utilized.
Obamacare Enrollment Approaching 10 Million
With roughly three weeks left in the enrollment period, 9.5 million consumers have enrolled in the federal and state exchanges, according to the Department of Health and Human Services. For Healthcare.gov, 87 percent chose a plan that is intended to benefit from tax credits and 35 percent are under the age of 35. Outside estimates anticipate total enrollment will finish near 12 million, after a 2014 enrollment of between 7 and 8 million.
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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