Washington, DC - The February poll hosted on the National Foundation for Credit Counseling (NFCC) website, www.DebtAdvice.org
, revealed that close to half of the 2,037 survey respondents, 46 percent, were unaware of the Social Security tax break which cuts the workers' share of Social Security payroll taxes by close to one-third during 2011.
"Since the tax cut results in a larger paycheck, it is puzzling why so many people remain unaware of this windfall money," said Gail Cunningham, spokesperson for the NFCC. "One of the basic elements of personal finance is knowing how much you make, as this should be the basis of all spending decisions. These numbers speak to the continuing need for financial education in our country."
Since the percentage of the tax cut is the same across the board, the lower wage earners won't realize as large of a dollar amount increase in their checks. However, those earning up to $106,800, the maximum amount of wages subject to Social Security taxes, could enjoy an extra $2,000 in their paychecks over the course of the year. Regardless of the amount, consumers should put this money to good use while they have it, as the tax cut was only approved for 2011.
For those who were aware of the extra money in their pockets, most indicated they would use it to deal with an existing debt concern. Twenty-two percent responded that they would utilize the money to catch up on past-due bills, while19 percent earmarked the money for increased payments to creditors.
Eight percent intend to put the extra money into savings. Only three percent felt that the best use of the money was to prepare for their future by putting it toward increased retirement contributions. While the intent of the tax cut was to stimulate spending, only one percent indicated they would treat themselves to something special, suggesting that consumers are not inclined to begin spending.
The actual poll question and results are as follows:
Q: Paychecks are now larger due to the social security tax holiday. What are you going to do with this windfall money?
- Save it = 8%
- Catch up on past-due bills = 22%
- Increase payments to creditors = 20%
- Increase retirement contributions = 3%
- Treat myself to something special = 1%
- This is news to me - I haven't heard a thing about it = 46%
If you need help determining the best use of this money, reach out to a trained and certified credit counselor. To be automatically connected with the NFCC Member Agency closest to you, dial (800) 388-2227, or go online to www.DebtAdvice.org
. For assistance in Spanish, dial (800) 682-9832.
"Note: The NFCC's February Financial Literacy Opinion Index was conducted via the homepage of the NFCC Web site (www.DebtAdvice.org) from February 1-28, 2011 and was answered by 2,037 individuals.
The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation's largest and longest serving national nonprofit credit counseling organization. The NFCC's mission is to promote the national agenda for financially responsible behavior and build capacity for its Members to deliver the highest quality financial education and counseling services. NFCC Members annually help four million consumers through close to 800 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC Member, call (800) 388-2227, (en Español (800) 682-9832) or visit www.nfcc.org. Visit us on Facebook at http://www.facebook.com/NFCCDebtAdvice and on Twitter at http://twitter.com/NFCCDebtAdvice.