Local residents worry about impact on their personal finances as cash disappears
No deal on payroll tax means more taxes in 2013
11:35 PM, Jan 2, 2013
11:56 PM, Jan 2, 2013
WEST PALM BEACH, Fla. - The story of Social Security can be told through Jim Estep, 85 of Lake Worth, and Kelly Elliott, 45, his daughter-in-law.
Elliott, and everyone else who pays payroll taxes, pays for Estep's retirement, his $19,000 annual Social Security benefit.
"That's all I get," said Estep.
But now Elliott, will have less money to pay for the occasional meal out in Downtown West Palm Beach.
She figures the expired payroll tax cut will cost her around $1,000 per year.
"Not as much going out and having fun and applying more to household items like rent, " said Elliott.
Where is your two percent going?
It goes into the Social Security trust fund, but that doesn't mean there will be more in there or that the life of the program will be extended.
That's because the government borrowed money to fill in the blanks created by the original payroll tax cut.
"The two percent payroll tax cut didn't jeopardize Social Security, nor does the two percent now coming out of your pay help Social Security," said financial analyst Greg McBride of Bankrate.com in North Palm Beach.
He says that Congress has effectively taken away the only raise in the last two years some people had.
He worries about the impact on the economy.
McBride says there are still lingering questions about how to deal with the fact that there are fewer workers for every retiree collecting Social Security.
"In good old American fashion, they just kicked the can down the road and didn't make any hard decisions," said McBride.