Social Security Tax Increase

If you’re like me, you most likely have noticed that your paycheck has shrank. No, you haven’t experienced a cut in your pay but in fact taxes have already started to go up for everybody. Depending on your income level, you’ll notice a $50 on up decrease in your paychecks.

This is all thanks to the expiration of temporary social security tax cuts. Prior to the financial deficit a couple years back, an automatic 6.2% of your paycheck was deducted for the funding of your future retirement, sponsored by the government. While a true statement, as long as you pay into social security your whole life, once you get on up in age, you will in fact receive monthly checks from the government. However, most financial experts doubt that social security will be around when we get to retirement age (around 2055 for me), or that it will only make minimal payments. Please, please, please (if you haven’t already) start thinking and actively contributing to a solid 401(k) plan. More info on that to come later.

Now, it is believed that our economy is on the rebound, or that our government is going broke (probably a combo of the both), and so we are starting to see taxes go up. A quick tax break that went away was this social security. While we enjoyed paying only 4.2%, it has now increased back up to its normal 6.2%. Expect your new pay level to be the normal pay level.

This probably caught many of us off guard. My hope is that your budget is already on track enough to be able to make a few adjustments. I’m not thrilled about it either, but this is just something we have to deal with.

“There are only two certainties in life; death and taxes.”