Put your payroll tax cut to work

January 31, 2011

The hubby gets a real paycheck, that is, regular money from a company as opposed to my periodic payments from various clients.

The much-ballyhooed payroll tax cut showed up in the paycheck he received last week.

So now we get to decide what to do with this bit of extra cash.

2-percent After some discussion, we decided the easiest thing would be for the hubby to bump up his 401(k) contributions by 2 percent. His employer still matches employee money, so this will give him (and by him, I mean us) even more eventual retirement money.

The decision really wasn't that hard.

We were used to doing without the money, so this way we'll save a bit more for retirement without even noticing.

Plus that 2 percent was supposed to into Social Security anyway, so putting it toward another retirement plan seems appropriate.

Other ideas on what to do with your new payroll tax cut raise come from The Daily Money (CBS Marketwatch), Your Money (New York Times), SmartMoney and MainStreet.com.

No payroll raise for some: Of course, some people aren't having to decide what to do with their payroll tax cut money. As I blogged previously, they aren't getting any.

Brian O'Connor, finance editor at The Detroit News, looks at this situation in his story For working poor, tax tweak cuts pay. Sharp-eyed readers will notice I'm quoted in the piece.

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Comments
  • Jaqlene Klum
    15 years ago

    ya i am fully agree with the retirement thing

  • Benny
    15 years ago

    I think it’s important to inform folks that this is instead of the $400 Making Work Pay Credit. I imagine couple’s who’s income was too high for the credit are the real beneficiaries of the full 2% increase!

Comments are closed.