So what are you going to do with your 2%...

[^_^ 5,021]

They should just have a website where everyone gets to go to a website and pick out a $50 gift card to their favorite restaurant/electronics store/grovery store...

You'll make an awesome socialist one day.

[Mr. Big Dog 10,747]

I don't see how it's most likely to be spent. I'm not raising any of my fixed expenditures in 2011 because of this raise, nor am I going to go buy discretionary ####### at the mall because of it. It will sit in my bank account until the next time I have a big purchase to make (which won't be in 2011, wait it might be).

I am not spending it either but put it into my 401K grabbing another 2% which my employer will put up. Look at those that have too much month left at the end of the money, though, and I would think that those folks will be spending that money. Problem with that approach is, of course, that those at or above the 106K limit (where the benefit is the largest) may not be the ones doing the spending of this extra money. Those that will spend it, your up to 50-60K or thereabout crowd, won't really have that much extra. In fact, those at the lower end of the income scale (20K or less) will get less in their paychecks in 2011 than they got in 2010. The swap of the "make work pay" tax credit that was in place in 2009 and 2010 with the payroll tax holiday works in your favor only if you make more than 20K. There are too many that don't.

[^_^ 5,021]

Look at those that have too much month left at the end of the money, though, and I would think that those folks will be spending that money.

Most of them will be using the money towards fixed expenses or debt paydown. And what will happen of that on Dec 31 2011 when the 2% goes poof? They will go waaaaah waaaaah taxes are going up oh no!

[Mr. Big Dog 10,747]

Most of them will be using the money towards fixed expenses or debt paydown. And what will happen of that on Dec 31 2011 when the 2% goes poof? They will go waaaaah waaaaah taxes are going up oh no!

Let's face it, taxes will go up - there's no way around it.

[^_^ 5,021]

Let's face it, taxes will go up - there's no way around it.

But the whole promise of the tax deferred 401K is that we'll be better off paying taxes on earned income later than today!

[Mr. Big Dog 10,747]

But the whole promise of the tax deferred 401K is that we'll be better off paying taxes on earned income later than today!

And that may very well be the case. Right now, you merely defer your taxes with a 401K. That can benefit you if you drop down a tax bracket with your retirement income income vs. your working age income. If you don't expect that, you may as well contribute after tax dollars today to your 401K and then draw your distributions tax free down the road. Choices, choices.