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Your Retirement Life: Choosing Where to Retire

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Newport County’s municipalities run seven pension plans. Two of the plans, the Portsmouth pension plan and the Newport firefighter’s pension plan were only 57.2% and 51.4% funded as of July 1, 2017. In July, 2018 they improved slightly thanks to the stock market.

If that weren’t scary enough, here’s a quote from one administrator: “If the market keeps doing what it’s doing, we’ll be out next year (60% funded). If not, by 2021. We’ll be 100% funded in 2041”.

This is on the heels of a record stock market.

On the same front page of The Newport Daily News: “City’s Schools Face Funding Cuts.” In Rhode Island, city budget increases, by law, are capped at 4% per years. “If we asked for what we need, it would be a 7% ask,” said one committee member. This is a real problem. Don’t let Newport’s mansions deceive you in terms of wealth. It’s mind-boggling to me that Newport has the worst high school in the state. It is basically in need of being ripped down.

But even if the council honors that (4%) request, significant cuts are necessary because of projected increased costs for school bus transportation, out-of-district tuition for special-needs students at places like Bradley School in Portsmouth or Harmony Hill School in Glocester, workers’ compensation costs and a series of other unavoidable cost increases such as staff salaries and benefit costs.

The words “unavoidable cost increases” are always part of the problem.

And today’s paper reports that the “City Budget Calls for 3.5% Tax Hike” in residential property taxes to $10.34 per $1,000, or $4,136 on a $400,000 home.

If you are planning on moving for retirement, I want you to make sure you understand the politics of your retirement destination. Examples like this are playing out in states across the country.

Here in Rhode Island, politicians thought they were getting something for nothing when Democrats passed Obamacare. Now the bill is coming due. The Wall Street Journal’s editorial board explains:

Medicaid expansion under ObamaCare was sold as a free federal lunch for the states, but the bill is now coming due. Witness Gov. Gina Raimondo’s plan to tax businesses that employ low-income workers to fund Rhode Island’s booming Medicaid case load. Look for this soon in a state near you.

Ms. Raimondo has proposed a 10% payroll tax on businesses with more than 300 workers for each employee who enrolls in Medicaid. ObamaCare requires businesses with more than 50 full-time workers to offer health insurance and duns employers $3,750 for each employee who purchases a plan on the exchanges with a federal subsidy.

But many low-income private employees sign up for Medicaid because they pay nothing. By contrast, the average family earning below 200% of the poverty line with employer coverage will pay about 14% of income on premiums and out-of-pocket costs, according to the Peterson-Kaiser Health System Tracker. More workers also qualify now because ObamaCare’s expansion increased Medicaid eligibility to 138% of the poverty line.

Despite having the ability to work with the federal government to solve some of these problems, Governor Raimondo has chosen to tax and spend instead. The board continues:

The disappointment is that Ms. Raimondo hasn’t sought flexibility from the Trump Administration to impose cost-sharing and work requirements as other states have done. In 2011 Ms. Raimondo championed public pension reforms that were among the boldest in the country. Yet as her party has moved left since she became Governor, so has she.

Ms. Raimondo has mandated that employers provide paid sick leave, pushed free community college, and proposed extending the state 7% sales tax to services and digital downloads. At the same time the state’s rate of private job growth (0.39%) has trailed Massachusetts (2.1%), New Hampshire (2.7%) and even Connecticut (0.63%). No doubt Connecticut Gov. Ned Lamont will welcome a competitor for worst business climate in New England.

Read more here.

Originally posted on Your Survival Guy. 

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E.J. Smith

Editor-in-Chief
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com.