Have a plan when Social Security deferral repayments come to an end

FORT LEONARD WOOD, Mo. — As you may remember, all federal employees Social Security taxes — also called Old Age, Survivors and Disability Insurance, or OASDI — were deferred for the period of September to December 2020, under a Presidential Memorandum issued on August 8, 2020.

This meant a temporary pay increase that we’ve been paying back since January this year.

Based on your salary, you may have had to pay back $43, or as much as $200 or more per pay period. As the repayment schedule comes to an end for most, it’s a good idea to come up with a plan for the extra cash we may have all become accustomed to being without.

Here are some suggestions:

• Start an emergency fund. Having cash on hand when emergencies arise can ease the stress caused by the event.
• Consider paying down debts. Every dollar you pay on an interest-bearing loan, credit card or line of credit, you are decreasing the months or years you will be burdened with the debt.
• Increase your contributions to your Thrift Savings Plan. The limitations have increased for 2022, with regular contributions now having a limit of $20,500, if under the age of 50. For those over the age of 50, the new limitation is $27,000.
• Start an IRA. Now might be just the time to open an individual retirement account that provides tax advantages for retirement savings.
• Start your child’s education fund. Tuition and living costs can currently run more than $30,000 per year at a state university — double that for a private university — and those expenses continue to rise each year. There are several ways to invest in your child’s future education tax free.

If you are wanting help making the correct financial decision for your money and your family’s financial future, call the experts at Army Community Service’s Financial Readiness Program. It’s free for all service members, their families and Defense Department civilians. Call 573.596.2078 for details.

(Editor’s note: Fink is an accredited financial counselor and personal financial readiness specialist with Army Community Service.)