Friday Financial Five – May 6, 2016

Friday, May 06, 2016

Dan Forbes, GoLocalPDX Contributor

GAO finds retirement savings lacking

According to the Government Accountability Office, 60 percent of households had no savings in a defined contribution plan as of 2013. A huge percentage of workers had no access to plans at the time of the survey, especially those in lower income households. For the higher income earners, only eight percent had no savings in their retirement plan. The future of retirement will entail providing access to plans and educating workers on the importance of putting money away.

Puerto Rico defaults on bond payment

Puerto Rico recently paid only the interest portion of a $422 million bond payment, prioritizing “essential services” over paying the principal on the debt obligation. It presents a microcosm of other troubled cities facing financial hardship that may be forced to make a similar decision. The island is counting on Congress to put together an aid package to help address the $70 billion in debt, but there’s reluctance due to years of perceived financial mismanagement.

One of country’s largest pensions facing cuts

Hundreds of thousands of workers await a Treasury Department decision regarding the Central States Pension Fund, which filed an application to drastically reduce core benefits. The pension has $16 billion in assets but requires a dramatic overhaul to sustain financial viability. The decision by Kenneth Feinberg, “special master” for the Treasury Department, will have ramifications for other large organizations looking to restructure payouts. The possibility of restructure was made possible by the Kline-Miller Multiemployer Pension Reform Act of 2014, which allows changes if the pension is projected to run out of money.

Title I Home Improvement loans keep on going

The housing rebound has provided an overall increase in equity for owners, but there is still a viable option for those with mortgage amounts at or above the home’s market value. The Title I loan is offered through the U.S. Department of Housing and Urban Development and isn’t equity based. The borrower can take up to $25,000 for home improvements and without a prepayment penalty. This type of loan can also be used for the very popular switch to a solar based system in order to save on electricity bills.

Apps to teach kids about finance

The country still lags in financial literacy, and it’s never too early to start educating children early about the importance of valuing money, credit, and budgets. There is a huge selection of apps available to help in the process, but it may take some research to find the right combination. Kids Money bills itself as a way to teach kids about savings and pocket money management. Bankaroo allows kids to keep track of virtual bank balances. There’s even an app for “The Game of Life”, which involves major financial decisions.

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

Related Slideshow: Oregon Business Rankings in US

See how Oregon stacked up against the other states in the U.S.

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ThumbTack

Oregon gets a C+ for small business friendliness from Thumbtack, in conjunction with the Kauffman Foundation.

According to the ranking:

Overall friendliness C+

Ease of starting a business B
Ease of hiring D+
Regulations D
Health & safety D
Employment, labor & hiring D
Tax code D+
Licensing C-
Environmental D
Zoning D+
Training & networking programs B+