Non PARF, but "O" cut your SS payments for 2 years by 2%-What to do?
 

Without getting political or debating the merits of the bill. The O-Man cut your employee SS contributions from 6.2% to 4.2%; for two years. I decided to up my 401K contribution by that exact same amount. The money was leaving your wallet anyway, you might as well put it into the 401K, 403b or IRA and actually get a real ROI on it. I've put close to the max in the last few years, but now I'm at the max, plus the $5,000 catchup for those over 50 years old.

I posted it here, because I really didn't want to get into the politics of whether it was right or wrong. In this RARE case, I think this was a good idea to help stimulate the economy, compared to the unemployment benefit extensions. I suspect most people will spend it not put it away for their retirement. :)

Smart move on your part. And anyone who is able to do so.
However,as far as the economy the biggest tax break should go to those with the greatest propensity to spend it.

I'm max on my 401(k) as well, so I'm considering putting it in my HSA, which is another pre-tax way to save. I'm thinking of using it for LASIK this year, if not at least it is earning some return.

Everyone should put some of it into an account for "the supposedly soon to happen radical rise in gasoline prices" that a lot of industry analysts are forecasting.

definitely take advantage of the Republicans cutting your employee SS contributions from 6.2% to 4.2% for two years & put it in a tax-advantaged account.

Ha. I just reorganized my compensation to minimize my earned income, so the cut is only going to be worth half of what it would have been last year. Paltry as it is, I'll no doubt spend it. I'm not going to live forever.

My 401K is maxed out and I can't put money in an IRA, so I guess I'll just spend it :D

That's what they want me to do right?

It's already happening, expect $4.50 by summer in kalifornia at least.

Demand is resuming overseas for finished prodicts. For a while they could import ther stuff cehaper than we could make it so that kept the prices really low, below break-even in most cases. Now that demand is up over there, the prices here are stabilizing (going back up).
Except for the fact that every time washington spends money we don't have it lowers the value of that money, which drives up the cost of crude oil which indirectly raises the cost of finished products.

At $90 per bbl crude, gasoline should realistically be at $3.50.
if crude his $110 which is very easily could, gas would have to go up to $4 to provide a sustainable ROI.
Oil refineries cannot lose money on every gallon forever. Eventually they have to cut production or shut down completely.

Ponder this:
at today's prices, crude oil costs $2.10 a gallon.
It costs about 20 cents to process that gallon into finished products.
The wholesale price for those products in southern Califorinia as of the end of business yersterday was 7 1/2 cents over the cost to purchase the oil based on a 3-2-1- crack spread. That means a typical refinery in So cal is losing money on every gallon it is making which surprisingly to most, is not unusual in the winter.

The wholeseale price has not significantly moved over the past month or two but the retail price has climbed about 25 cents.
In other words:
THE RETAIL GAS STATION OWNERS ARE MAKING A KILLING RIGHT NOW WHILE THE REFINERS ARE TAKING IT IN THE SHORTS!

Assuming the market stabilizes, gas should shoot up even more by early spring.

I'm going to take that extra money from SS and use it offset a small part of my large health insurance premium increase that becomes effective January 1st!

Wow. Obama is a republican? Go figure.

Maybe it was all Bush's fault after all ROFLMAO.

It does not matter how many times you say Obama, RWeb sees Geo W. Bush in his headlights and says its a conservative plot. Sad to see such a waste of a persons mind...

Am putting an extra 4% in my 401k to make up for Obama's move here. The boss matches it up to 10% so might as well.

removed comment...would have helped it to parf.


I hope to save it but it will probably get sucked into the monthly budget.

"Without getting political or debating the merits of the bill"

Probably one of the most ridiculous statements I've read on this site so far. A troll is a troll is a troll.

When does the cut go into effect? Jan 1st?

You are so full of it. I put this out solely as a forum to discuss what to do with the money. If I wanted to do otherwise, I'd have stuck it in PARF. You sir are the troll.

I don't care who you are, that's funny right there!!!

that money is going straight to my mortgage

Well, we're in the same boat. My employees will be getting a 2% "raise" though.

Yes, January 1st, 2011. Which means the payroll calculating programs will all have to be adjusted between now and the 1st week of the year.

President Obama would never have done this if not for pressure from the Republicans.

I guess Hugh is trying to sneak his political post into OT, but he betrayed himself 2x - once by confusing the real impetus for the action, the Republican victory and then negotiation with Obama.

OK, a little PARFy, BUT again I put it out primarily to discuss what to do with the money. An HSA is an idea that I hadn't thought about, for example.

I'm not sure if it's all HSAs now, but the one my current employer offers is "use it or lose it" on a yearly basis. A few years ago (2004/2005, whenever they came out) you could pay into them and there was no requirement to use or lose by the end of the year, it just rolled over.

I'm not sure if this is a change in the rules or not, but the "new" HSA sucks (IMHO). I still have my HSA from my old employer with no such provision that has some money in it should I ever need it (rolls over from year to year, not sure if I can add to it still).

Something to consider though - if you over-estimate your yearly expenses you could end up spending next year's holiday season running around to Dr's offices trying to burn through your allottment, which doesn't sound like a particularly fun or productive way to spend the holidays...

Needless to say, I don't bother with the current HSA (the one with the "use or lose" provision), not worth the (potential) hassle, IMHO.

If you can get one without the "use or lose" stipulation (if that's possible) I'd say it's as good a place as any to stash money tax-free.

Don't confuse HSA with FSA. With HSAs you don't have to spend the money in the same year, that is an FSA that you are thinking about. The money in the HSA is yours for medical expenses and your deposits are pre-tax. There are penalties for early withdraw before age 65. We added a high deductible with HSA plan at work this year and provided a company paid monthly HSA deposit. It is even an interest bearing account. You have to be enrolled in a high deductible insurance plan though.

I think HSA's are for people who don't get full benefits. FSA (flexible) are for those with full benefits. I put $600 a year into mine and have $5 leftover right now. I think the limit is $5000. HSA has totally different rules.

Another give away that I won't be getting.

I'm no expert on this, but HSA are used in conjunction with a high deductible health insurance plan. For me, this was hands down the best option available, and many of our employees at work agreed. If by benefits you mean co pays and deductibles, then yes there is a difference. With low deductible plans, you are doing nothing more than paying your deductions and co-pays up front -- even if you never use it. With high deductible, the premiums are MUCH cheaper and you pay higher co-pays as needed, but you can use your HSA for those payments. So, it depends on your situation. Sorry, a bit off topic.

On topic, an HSA is another pre-tax option to consider.

This is precisely correct. The HSA combined with a high deductible plan is the least expensive way to get fully covered. You build up money in the HSA and then use that for medical expenses up to the yearly deductible. Beyond the deductible, the main plan comes in.

The cost for my High deductible plan is now $283/yr for myself and my wife, with a $5000 deductible and $8000 maximum yearly outlay. IF I max out in a year, I pay $283*12+$8000=11396

Using the number from my old plan with the same increase from 2008, the plan would be $1000/mth. The deductible is $2000 ($1K each), and has all sorts of copays ($50-75 for a doctor vist, $150 for ER and $250 for Hospital stay). Without the co-pays, if I max out it would cost me $1000*12+2000=$14000.

So the 1st plan saves about $2500 IF you max out. What if you don't use the plan?

$3396 vs $12000, or over $8500 in savings!!!

So tell me again, which one makes more sense?

My HSA plan is paid for by my employer, single coverage, wife has her own. I have a $3000 deductible. I maxed out my deductible by June this year, so everything is paid for until Dec. 31. I hope I dont have a heart attack, but if I do, it's covered 100%. I just might increase my contribution soom too, only to see EVERYTHING else go up. It's all Bush's fault--oh oh, what did I say?

be sure to check on any recent changes to ... whatever acronym you use

IIRC, I saw a news article on some changes recently.

Thanks for the reminder. I am going to increase my contribution to my deffered compensation plan (read government version of a 401k), which takes weeks to actually process the change.

Again, HSA and FSA are completely different. For HSA, no changes for 2011, except vitamins and supplements are not eligible this year. Again, I'm no expert on this, so research on your own.

I got forced out of my HSA with a 60% premium increase a few months ago.

I confess to not following the news as closely as I should have. I was aware that the tax hikes were suspended (I find that more palatable than saying tax cuts were extended) but didn't know about a FICA cut.

I would prefer to see SS phased-out completely but I guess this is a step in the right direction. I'll find something constructive to do with the money. Race tires?!?!?