Here's a timely retirement planning tip from Greg Burrows, senior vice president at The Principal Financial Group: Put the extra 2 percent of salary that you'll gain from the Social Security tax holiday, which Congress awarded us in 2011, in your 401(K), 403(b) or IRA.
Burrows calculates that if a 30-year-old earning $50,000 per year would save the extra 2 percent for 52 weeks, it would cost him only $19 per week, but would grow to more than $16,600 by the time he turned 66 and was ready for retirement.
That's not a fortune, but when I run $16,000 through the ImmediateAnnuities.com calculator, it's worth $104 per month -- enough for a couple of dinners out or two tanks of gas for my gas guzzler. I'll take it.
Or here's another thought that might in the long run be just as valuable. Let's suppose our 30-year-old bought a house five years ago and has 25 years left on a $100,000 mortgage. If he took the $1,000 from this tax holiday and at the end of 2011 put the money toward his mortgage, over the remaining life of his loan, he would save himself $2,277 and be mortgage-free at age 55. Now that he doesn't have to pay a mortgage, he can save the payment -- $537 per month -- in his retirement fund, earning an average of 5 percent interest. By the time he's 66, according to Bankrate's simple savings calculator, he'll have put away $95,662.34 -- enough to spend January and February someplace warm every year.