Are they phasing out social security?

robinsokj · January 2011

Pardon my ignorance on the subject.

My H just got his pay for this week and the SS take out was $70 less than less week (he gets paid weekly).

Erika6504 · January 2011

I don't know how it's working but apparently they are reducing the amount that's being taken out. I know my FIL said that mine will go down 2%. I don't know if that's across the board or if it's age-based or income-based.

KRMac · January 2011

It is some sort of stimulus right now - less into SS and hoping that you'll spend it instead.

lpstl · January 2011

No, it's not being phased out, the tax rate was dropped in 2011. I think it went from about 6% to 4%.

lpstl · January 2011

More info, from here:

The amount workers pay into the Social Security trust fund will temporarily drop from 6.2 percent of taxable wages up to $106,800 annually to 4.2 percent in 2011 only. For self-employed workers, the Social Security tax rate will drop from 12.4 percent to 10.4 percent next year, due to provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, signed by President Obama on December 17. Employers will continue to pay 6.2 percent of wages into the entitlement program.

The Social Security system's finances are not expected to be harmed because the trust fund will be reimbursed for the full amount of the tax break from the general fund of the Treasury. However, this change also means that the Social Security trust fund will no longer be completely funded directly by citizen contributions.

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