You read it correctly, folks, for 2011, and 2011 only, the employee share of FICA has been reduced from 7.65% to 5.65%. That 2% savings is $1,000 for the year for someone with taxable wages of $50,000. When was the last time you got $1,000 for free?
Since you weren't planning to see that money anyway, here are some good ideas about what to do with it:
- save it in your IRA, if you have one
- or put the money in a regular after-tax retirement account at your bank
- if your employer has a 401(k), contribute it there
- it'll go even father if your employer matches your contributions to your 401(k); you could get an extra $1,000. How cool is that?
Now's the time to take advantage of this money. Currently there are no provisions for extending this to 2012. As we all know, budgets are tight, so use the money well this year.
After all, what's holding you back from saving money you wouldn't have otherwise had?