Look for your 2% temporary raise

I don't know if I like this or not.  I'm pretty sure social security is going to run out before I retire.  And I don't see anything being done to prevent it.  So I'm paying in every paycheck for possibly nothing during retirement.  This will likely put the SS pot further in the hole.  But here it is anyway...

Now that 2011 is here, there is a good news for millions of workers in the United States—more money in their paychecks. Thanks to the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, there has been a 2 percent decrease in Social Security withholding taxes. The short-term tax break has been referred to as the payroll tax holiday. Both self-employed individuals and employed workers will see the bump in their regular pay effective January 1, 2011.

How Change Has Come

Employees were paying 6.2 percent of their pay toward Social Security. For 2011, employees will only have to pay 4.2 percent on income below $106,800. For self-employed individuals, the self-employment tax also drops from 12.4 percent to 10.4 percent. There will be no additional checks accompanying your normal paychecks. The adjustment will be made on your regular check, with the two percent difference added in throughout 2011.

The tax act for 2011 will only be a short-term tax break. Once 2012 hits, the payroll tax holiday will no longer be in effect unless the federal government once again steps in to extend the time period for another year. In 2012, the Social Security withholding amounts will go back to the current rate.

What are you going to do with your two percent?  :)