2% Raise for EVERYONE... but only for a year.

[sam_gordon]

So we got a memo from our corporate HR the other day. In 2010 the SS tax was 6.2%. The government (in it's infinite wisdom ) has decided that in 2011, the SS tax will be 4.2%. In 2012, it will go back to 6.2%.

This should affect everyone who has SS tax deducted from their paycheck. Of course, increases in medical insurance payments will probably wipe it out, but enjoy!

 

[leadfootlevi]

At least it's something? I'm sure it will help some people.

 

[nunzia]

not to get political, but doesn't anyone else think it's odd that they decided to put less into what is essentially a bankrupt program? Isn't that like owing $10,000 on a credit cad and instead of sending them $10 a month you decide, what the heck, I'll only send them $8?
I'd suggest putting that extra cash in your retirement fund so that when they lower your SS payments you'll have a little more cushion.. I just don't get the logic.

 

[RitaE]

Yeah, I'm going to try and get ours into a Retirement account too. Hopefully we'll manage that even with skyrocketing tuition at the colleges.

Can't be political here so I'll be quiet about my opinion of the matter.

 

[Pooh_Friend#1]

That sure is nice of them. They freeze my pay for 2 years, but then decrease SS tax which then effects the Program later on. Doesn't make sense.

 

[rosebud4]

I just got my first paycheck with this taken out. It was nice to get the discount but the federal taxes raised the amount of the discount so there was no difference in the paycheck!

 

[dhuba]

not to get political, but doesn't anyone else think it's odd that they decided to put less into what is essentially a bankrupt program? Isn't that like owing $10,000 on a credit cad and instead of sending them $10 a month you decide, what the heck, I'll only send them $8?
I'd suggest putting that extra cash in your retirement fund so that when they lower your SS payments you'll have a little more cushion.. I just don't get the logic.

Exactly what I was thinking!

 

[Boston Tea Party]

No effect here since I don't pay into Social Security but rather the Teacher Retirement System in my state.

 

[bellebud]

yep, don't get it at all!

we don't plan on us (in our 40's) or our children being able to really get SS when we're older... we'll see. We figure if we get it, it's gravy. We're trying to set ourselves and our children up (9 and 11yo) now so that we're all ok when we're older. I don't want to be a greeter at Walmart when I'm 75 (if I make it that long!) Although I probably wouldn't mind being a greeter at disney

 

[RitaE]

A growing trend in America - Retirement will never happen.

http://biz570.com/economy/banking/w...w-normal-for-middle-class-americans-1.1084092

I saw a recent article in regards to Canada that had very similar views. More people plan to work through their retirement years than not.

 

[shelwoj]

Well now I know why our check had $29 more in it.

 

[Planogirl]

I doubt that I will even notice this considering my paycheck.

I agree with those who say that this doesn't make sense though.

 

[MissBritt]

Makes a difference of $6 a week for me since we upped our insurance coverage, insurance rates went up 15% overall, got no SOL increase this year, and my pay is also frozen for 2 years.

 

[angwill]

This was done because Obama could not get the income tax discount he gave last year to pass. He was able to get this to replace the $20 or so per paycheck in income taxes that went up this year. It will just even out the paycheck if not everyone would have recieved about $20 less per paycheck this year.

 

[mrudman]

Won't affect me since I don't pay into Social Security (pay into state retirement instead).

But maybe we'll see a slight increase in DH's paychecks... would be nice since he hasn't had a raise in 3 yrs, and makes peanuts as it is.

 

[Gr8t Fan]

We've already made arrangements to pay the extra amount toward our mortgage. This, coupled with a few small changes, and we will have it paid off two months sooner than planned.

 

[eliza61]

A growing trend in America - Retirement will never happen.

http://biz570.com/economy/banking/w...w-normal-for-middle-class-americans-1.1084092

I saw a recent article in regards to Canada that had very similar views. More people plan to work through their retirement years than not.

it is an interesting article but no retirement is not from ss. the article says most americans don't SAVE for retirement. So if you're not willing to save for it, why would you expect to be able to do it? (not you RitaE, I mean the collective "you").

While many Americans express worry about their retirement prospects, judging from their finances they probably aren’t worried enough. Respondents predict they will need a nest egg of $300,000, but have saved just $20,000 of that amount for retirement (figures throughout are medians, the midpoint of responses). They expect to live on retirement savings for nearly two decades (19 years), while planning to spend 10 percent of their nest egg every year. The industry recommendation is to withdraw no more than 4 percent annually

Too many Americans have their heads in the sand in the face of obvious savings deficits,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust. “People are not even close to where they need to be in total savings. Barring a miracle, a winning lottery ticket or a big inheritance, they’re going to be forced to dramatically cut back their lifestyles after retirement.”


Social security was never designed to be anyones total revune during retirement and unfortunately the concept of "saving" has disappeared from the American consciousness. Remember before the recession hit, the average savings rate in America was negative. It wasn't until recently when we started hemmoraging jobs that we finally had a V-8 moment and thought maybe I should charge every thing I see. It wasn't until people started losing their jobs that they thought maybe it wasn't a good idea to buy a 500,000 house on a 30K salary.

So really, we're going to blame social security for the last 30 years we've been living la vida loca and went from a culture of saving to a culture of spending and not being able to retire? Really?

 

[princessbride6205]

As a PP alluded to, the Making Work Pay tax credit ($400 for individuals, $800 couples) went away for 2011, so the compromise was the Social Sec. tax discount. This works out to less money this year for anyone making less than $20k ($40k for couples). But anyone making over that, will essentially get more money (that is, less paid to the gov't) for 2011. Also people who are not enrolled in Soc. Sec. will actually pay more taxes this year, because they had been eligible for the Making Work Pay credit, which is now gone.
Herald News-Sun Times Article

So in the end, this is a raise for people in the middle and upper class who contribute to SS. Once you subtract the $400 credit that expired, the maximum "raise" any individual will receive is about $1,736 - about 1.625% of their salary. The maximum benefit of this tax cut is for individuals making $106,000 per year (or couples making double that). They will see the highest percentage increase in their pay (1.625%) and it goes down from there. Individuals making $40k will have about a 1% "raise." Unfortunately, none of us are getting a 2% raise or even a true 2% decrease in taxes. I won't discuss my opinions to save from getting political, but I wanted to at least get some facts and math out there for anyone interested.

 

[Green Tea]

It is a very odd tax change, I think. I don't mind the extra money, for sure, but I really didn't expect the tax to be lowered. Especially didn't expect the rate to fall and the ceiling to stay the same.

 

[Ava]

I got my first check with the new SS tax rate taken out today. Compared it to my last check & there is a small decrease in the amount of SS tax taken out. However due to other changes in my payroll deductions my net pay only increased about 1/2 that amount. I decided to up my 401k contribution by 1%. The increase in my net pay is not enough to make a real difference, it would just end up being frittered away, so I'm better off not even getting it.