Social Security has always been a hot topic politically. There are almost no circumstances in which an elected official would ever even imply that Social Security should be cut.
But this is 2020. Starting today, September 1st — two months before Election Day — Americans will start to see more money in their paychecks. That’s because the payroll tax (Social Security and Medicare) we are accustomed to seeing deducted every pay period will be deferred until tax time — five months after Election Day.
That means the Social Security Administration, whose entire budget is designed around a steady flow of income from the payroll tax, will have to wait until Americans file their taxes to receive any more money.
Social Security and Payroll Tax
Given the increased tax bills that Americans will face because the government deferred the payroll tax — this is not a “tax cut” — analysts expect there to be a record number of late returns. This will further starve the Social Security Administration of the money it needs to help support older Americans and seriously disabled people.
A disaster is looming. That’s why I recommend everyone who is eligible to collect Social Security do it as soon as possible. It simply may not be around if you wait until 70.
I know this goes against Suze Orman’s advice. I think she’s great. But things have changed. If you’re not familiar with Orman’s stance, she advocates waiting as long as possible to collect Social Security in order to receive the highest payout.
Orman’s advice was based on financial science and number crunching in the “before time”. We live in a new world now.Today we have to think about our individual survival because no one else will.
If you have any questions about how the deferred payroll tax will affect your tax bill, contact me. I can get you started on the bookkeeping aspect. Additionally, I can refer you to an accountant to do the rest — thus saving you some money.