Social Security – Can we really enjoy it before we retire?

Yes we can.  Well, during 2011 anyway.  As of January 1, 2011, all wage earners, including the self-employed, have seen their paychecks go up.  This is because part of the recent tax bill reduced the FICA portion of social security withholdings by 2%.  This is the first change in that rate since 1990 when it went from 6.06 to 6.4%.

Of course I am not really talking about enjoying the ability to “receive” social security.  In fact some may argue that they cannot enjoy the thought of keeping something that was theirs to begin with.  I guess the way I am looking at it; social security is something I will be paying until I retire.  That said, if I get to keep something in 2011 that I have not been able to keep, and spend as I see fit, for more than 20 years, I am going to “enjoy” it.

It is not going to be a big payday.

But it could be a nice little nugget to use for some special purpose.  If your wages in 2011 reach $50,000, the pennies from heaven will only be $1,000.  It amounts to 2% of the first $106,800.00 of Social Security taxable wages in your pay.  And for now, this will only be in effect for the calendar year 2011.
If you have noticed that your paycheck went up the first of the year, but did not think you had received a raise from your employer, this is likely the source of your new found prosperity.

Spend it wisely.

Remember, you will most likely never see this little bonus again after this year.  It would be wise not to let it creep into your standard monthly operating funds.  That could cause you to suffer a “cut” in pay when 2012 begins.  Effectively, that may have the effect of turning this little positive into a big negative.
Instead, find a way to set these funds aside.  Maybe it is just more savings.  Maybe you could start a Christmas gift fund.  You might even be able to apply this money as additional payments on one of your debts.  Where ever you decide to direct the money, make it a noticeable benefit to your personal financial position.

In Closing.

By making one of these specific financial decisions, you should be able to avoid the feeling of loss when this little benefit expires at the end of 2011.  It may not be much, but try to enjoy it.