Here are three of the week's top pieces of financial advice, gathered from around the web:
A retirement home's fiscal health
When you are considering moving into a retirement home, the financial stability of the firm that runs it is "a legitimate concern," said Peter Finch at The New York Times. The last thing you want to deal with in your golden years is your retirement community's bankruptcy. To assess a retirement home's financial health, begin by checking its occupancy rate. If it's above 90 percent, the company is usually "doing something right." Most communities increase their fees by roughly 3.5 percent annually; if there hasn't been a recent fee increase, it may be a red flag that the home is struggling to maintain occupancy. Investigate the community's debt rating, profitability, and cash reserves. Finally, ask how involved residents are in major financial decisions.
Changing states for tax purposes
Entrepreneurs "should think twice" before moving a company to a low-tax state, said Darla Mercado at CNBC, especially if they have a firm with multiple locations and a wide client base. Your company's "tax nexus" is based on a number of factors, including "where your employees are, where your property is located, and whether you have inventory in a particular location." How all that is taxed differs from state to state: Some states will tax firms "based on where the work is performed, while others tax businesses based on where the customers are located." If you can easily move to a low-tax state, you'll need establish domicile to prove it's "your true permanent home." Some states will "challenge individuals" to prove they have genuinely relocated.
Borrowing costs on the rise
The Federal Reserve's decision to hike interest rates last week means some consumers will "face higher borrowing costs," said Paul Davidson at USA Today. The widely anticipated move saw the Fed raise its rate target by a quarter of a percentage point to a range of between 1.5 percent and 1.75 percent. "Two to three more such hikes are expected this year." Credit card rates will rise almost immediately, with those holding an average debt of $10,000 forking out around $25 extra per month. Holders of home equity lines of credit could also see a small rise. The impact on fixed-rate mortgages will be more gradual. Average 30-year fixed rates have already risen from 4.15 percent to 4.54 percent since January, owing to tax cuts and perceived inflationary pressure.
