Friday Financial Five – July 29, 2016

Friday, July 29, 2016

Dan Forbes, GoLocal Contributor

Fed holds steady again

Despite strong recent economic indicators, the Federal Reserve again held rates steady this week, while leaving the door open for a September increase. Broader markets had little movement on the news, and mortgage rates continue to follow the ten-year treasury’s lead. Positive employment news in June led to speculation that a rate hike was possible, but the Fed erred on the side of caution for the time being. With inflation tempered and other countries moving into negative rate territory, it may take similarly solid employment reports in July and August to get the first rate hike of 2016.

Planning for unmarried senior couples

For unmarried partners nearing or in retirement, matrimony may have meaningful financial implications. If one person doesn’t have much of an income record, the possibility of increasing Social Security benefits is huge. There may also be an income tax benefit (or penalty) that needs to be assessed by running the tax returns both ways. For pensioners, there may be a marital requirement to receive a survivor benefit. Finally, the estate planning ramifications need to be spelled out if the couple isn’t legally married.

More overseas retirement destinations

Maybe it’s related to the unpopular presidential candidates, but lists of desirable countries for retirement keeping rolling along. The “Retire Overseas Index” rates countries based on 12 categories, including cost of living, safety and taxes, among others. The study cites Portugal and France for their healthcare, Panama for tax environment, and Barcelona, Spain for its infrastructure. Overall, Algarve, Portugal tops the list of top spots. Just as states compete to become attractive retiree destinations, we may find more ex-patriates choosing to live out their retirement years outside of the country’s borders.

Harvard study targets drivers of divorce

The entire divorce process is a financial study in and of itself, but an analysis by a Harvard sociologist attempts to pinpoint the biggest financial factor ultimately leading to a couple’s decision to separate. The result wasn’t an income issues or the rise in the number of women in the workforce. The biggest driver, according to the statistics, is the husband’s employment record. A couple married since 1974 had a 2.5% chance of divorce if the husband was employed. For those couples with a part-time or unemployed husband, the chance of divorce increased to 3.3%, a nearly 33% increase.

Lexus engaging in no-haggle pricing

Imagine going to a car dealership and knowing the exact price necessary to make a purchase. That’s the no-haggle pricing concept in play at 11 Lexus dealerships. The results have been positive for the dealership so far. Customers only deal with one sales consultant and know that they don’t have to bother going back and forth with a sales manager, making the process much more seamless. Deal-seekers know to avoid these particular Lexus dealerships if they’re looking for the biggest car bargain. Any success Lexus has in this area may have a domino effect across the car market.

Dan Forbes, a CFP Board Ambassador, is a regular contributor on financial issues. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].

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Friday Financial Five – July 29, 2016

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