The Hartford has launched a new marketing campaign,” Two for Tomorrow,” advising Americans to take the 2% reduction in Social Security payroll taxes and use the money to boost their retirement savings.
The campaign is aimed at individual investors, plan sponsors and financial advisers, and The Hartford estimates it will reach 1.6 million retirement plan participants. It consists of web-based education tools and an emphasis on the benefits of matching contributions and tax-deferred savings. The Hartford notes that 2% saved over 30 years could add up to more than $83,000.
The government reduced Social Security payroll taxes by two percentage points from 6.2% to 4.2% in 2011 and 2012 on wages up to $106,500. That means someone with an annual salary of $50,000 would receive an extra $1,000 in take-home pay this year and next, The Hartford noted.
“The reduction in Social Security taxes is a perfect opportunity for retirement plan participants to redirect these additional funds into their retirement accounts,” said E. Thomas Foster, Jr., vice president and national retirement spokesman for The Hartford. “It’s a painless way to enhance retirement savings and help build a more secure financial future.”
“For those who haven’t been taking full advantage of their employer match on retirement savings, 2% can net 3% or 4%,” Foster said. “Many employers match employee retirement savings up to a specified ceiling. Employees who do not take advantage of this are missing out on investments that can automatically provide a substantial return.”