Thread: 2 Percent Social Security Tax Cut

Huh? Who cares? Havent you been reading Birch's thread?

The SPX is going up to 1900 by Halloween and we are all going to make 175% in our TSP by 2012!!

What me, Worry?

(ok its sarcasm) Have a nice Weekend!

Originally Posted by FAB1

Huh? Who cares? Havent you been reading Birch's thread?

The SPX is going up to 1900 by Halloween and we are all going to make 175% in our TSP by 2012!!

What me, Worry?

(ok its sarcasm) Have a nice Weekend!

Have a good weekend too.

It was Pill.

http://www.tsptalk.com/mb/showpost.p...&postcount=145

From: DON Benefits Officer
To: All Civilian Employees

Subj: TSP Savings Opportunity

1. The ''Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010'' provides that during 2011, but only in 2011, the Social Security tax rate paid by employees will be temporarily decreased from 6.2% to 4.2%. As a result, Civil Service Retirement System (CSRS) Offset and Federal Employees Retirement System (FERS) employees will see their Social Security withholdings decreased by 2%. The change in deductions will be reflected on the Leave and Earnings Statement under "Deductions" as "OASDI". Since CSRS employees do not pay Social Security, this change does not affect them.

2. This is a great opportunity for FERS and CSRS Offset employees to boost retirement savings. Think about saving the 2% in your Thrift Savings Plan (TSP) account. This could have a significant impact on amounts available for retirement, especially for younger workers who will earn a compounded return on the amount for decades. This action will also lower your federal and state income tax in 2011 as the contribution will be tax-deferred. The Social Security tax reduction is a TSP opportunity.

3. You can increase your TSP contributions electronically using the Employee Benefits Information System (EBIS) available at http://www.donhr.navy.mil/. Under the Benefits tab click on "EBIS".

4. If you have questions about TSP, call the Benefits Line at 888-320-2917 and select menu option #4 to talk to a Customer Service Representative (CSR). CSRs are available 7:30 a.m. to 7:30 p.m., Eastern Time, Monday through Friday, except on federal holidays. The TTY number for the deaf and hard of hearing is 866-328-9889.
__________________

Thanks Pill

Maxing out your contribution if able is a non lossing situation. Now that I am retired and drawing a monthly payment that is awesome for the rest of my life and then some, ................is the best thing you can do for yourself and family; trust me!

Originally Posted by Zebra

Maxing out your contribution if able is a non lossing situation. Now that I am retired and drawing a monthly payment that is awesome for the rest of my life and then some, ................is the best thing you can do for yourself and family; trust me!

I totally agree with your aforementioned statement, just curious to know at what age did you start maximizing your contributions? I just started last year with 26 more years till retirement.....I'll probably need 2-3 million by then?

poker, you are so far ahead of the game already if you're maxing out only 4 yrs into employment and are young enough to anticipate 26 years more in front of you.

obviously you understand what you're up against way more than i ever did til after i already had 10+ years skin in the game. congratulations on understanding so quickly and having capacity to do the max so early as well.

The 2% SS tax cut doesn't do a thing for me since I don't pay SS on my annuity & FERS withdrawal & my spouse is a teacher in a State they don't pay into SS.

Somehow the whole thing just seems like kind of a backdoor way for the govt to fund a "stimulus" using SS funds.

My annuity was reduced anyways due to increase in health insurance (no cola caust there's no inflation? HA!) & OPM changing my tax withholding to reflect the temporary income tax rate reversion thanks to a Congress that couldn't pass a budget on time. I have no idea why OPM decided to go ahead & do me the favor of automatically upping my withholding for me without my asking even though I had previously set a specific dollar amount I wanted withheld based on my calculation of our total household tax burden from all source of income. Silly me, trying to have no more tax withheld than I actually owe.

And where's this NARFE outfit on this whole debacle? Haven't heard a thing about them. And they want me to pay them dues? lol!

OK - sorry folks, I had to get it out somewhere - rant over now.

Originally Posted by Texarkandy

The 2% SS tax cut doesn't do a thing for me since I don't pay SS on my annuity & FERS withdrawal & my spouse is a teacher in a State they don't pay into SS.

Somehow the whole thing just seems like kind of a backdoor way for the govt to fund a "stimulus" using SS funds.

My annuity was reduced anyways due to increase in health insurance (no cola caust there's no inflation? HA!) & OPM changing my tax withholding to reflect the temporary income tax rate reversion thanks to a Congress that couldn't pass a budget on time. I have no idea why OPM decided to go ahead & do me the favor of automatically upping my withholding for me without my asking even though I had previously set a specific dollar amount I wanted withheld based on my calculation of our total household tax burden from all source of income. Silly me, trying to have no more tax withheld than I actually owe.

And where's this NARFE outfit on this whole debacle? Haven't heard a thing about them. And they want me to pay them dues? lol!

OK - sorry folks, I had to get it out somewhere - rant over now.

Same boat here with the annuity, the added tax and the $13.00 a month health insurance increase.

I think they added the tax automatically to everyone without waiting for W4 updates to increase withdrawls for more avalible funds. Too bad for them the tax breaks were extended. Rant over

I just posted this for non-retired younger FERS type peoples.

Originally Posted by pokerstar629

I totally agree with your aforementioned statement, just curious to know at what age did you start maximizing your contributions? I just started last year with 26 more years till retirement.....I'll probably need 2-3 million by then?

The thing is for most of us in the retired or ready to retire category we weren't allowed to "max out" for many years. The system allowed us to up the ante 1% a year for a long long time which really stunk in my case. We also didn't have the the ability to move funds or do any of our own changes which equally stunk.
Fast forward you young guys have the world at your feet and the ability to max out as best you can before you get to the age where you reach those plateaus of being hammered by kids in college and similar extreme expenses. Toss in an ex wife and you could find yourself being hardly able to make much of a contribution at all. If you have already plowed a pile of cash in there you will have that working for you regardless of what happens afterwards.
Taking advantage of something like this 2% is the best way to up your ante painlessly. Other than this, grade and step increases are the best way to increase contributions. Use them all, live at least a pay grade below your means and you will be amazed how the money accumulates. You will be thanking yourself deeply in 20 years. Keep your eye on the prize!