A crystal ball for taxes

Payroll taxes went down in 2011 from 6.2% to 4.2%, which is due to a one-time change in the law. Ideally, Americans would have used that extra cash to increase their retirement savings, but at this point, it’s hard to tell what they did. Although there is some speculation that the reduction could be renewed in 2012, payroll taxes could go back up to 6.2%. For Americans who were able to save, only time will tell if those who have gotten used to socking away more in their retirement savings will revert back to smaller contributions in 2012 (compared to 2011) because they can’t afford to do it or if it’s too painful.

 

Leave a Reply