What does FICA mean?

 This in one of the more common questions i get about Social Security. This question and answer are right from the ssa.gov website. Q17:  What does FICA mean and why are Social Security taxes called FICA contributions?

A:  Social Security payroll taxes are collected under authority of the Federal Insurance Contributions Act (FICA). The payroll taxes are sometimes even called "FICA taxes." In the original 1935 law the benefit provisions were in Title II of the Act and the taxing provisions were in a separate title, Title VIII. As part of the 1939 Amendments, the Title VIII taxing provisions were taken out of the Social Security Act and placed in the Internal Revenue Code. Since it wouldn't make any sense to call this new section of the Internal Revenue Code "Title VIII," it was renamed the "Federal Insurance Contributions Act." So FICA is nothing more than the tax provisions of the Social Security Act, as they appear in the Internal Revenue Code.

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Highlights for our July 10th Your Safe Money Show

 For the July 10th edition of Your Safe Money Show we'll discuss grandparents raising their grandchildren the joys and challenges that can bring. Also we'll share the benefits of working longer and non-financial assets to consider in your estate plan. Listen at 8 a.m. Saturday at Nice 95.5 FM KBEK. They stream live at kbek.com. Hear recent shows at our podcast page at yoursafemoneyshow.com.

2021 tax information with retirement accounts

 Just a reminder on tax changes and amounts for 2021.

Many key dollar limits on retirement plans and IRAs remain the same for 2021. For example, the maximum contribution limits for 401(k), 403(b) and 457 plans stay at $19,500, while people born before 1972 can once again put in $6,500 more as a "catch-up" contribution. The 2021 cap on contributions to SIMPLE IRAs also stays the same at $13,500, plus an extra $3,000 for people age 50 and up.

The 2021 contribution limit for traditional IRAs and Roth IRAs also stays steady at $6,000, plus $1,000 as an additional catch-up contribution for individuals age 50 and up. However, the income ceilings on Roth IRA contributions went up. Contributions phase out in 2021 at adjusted gross incomes (AGIs) of $198,000 to $208,000 for couples and $125,000 to $140,000 for singles (up from $196,000 to $206,000 and $124,000 to $139,000, respectively, for 2020). If you have question call 320-679-5183 or go to yoursafemoneyshow.com.

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Closed on July 5th

 Sjoberg & Holmstrom Financial Services and Your Safe Money Show will be closed on Monday July 5th.

We will be open at 8 a.m. Tuesday July 6th. We will monitor messages at 320-679-5183.

Your Safe Money Show topics for July 3rd

 Coming up on Saturday's (July 3rd) edition of Your Safe Money Show. Now is the time for a mid-year review so you can take control of your money if needed. I also want to look at strategies to teach children financial independence. And I have 5 tips for buying a home this summer in this tough buyers’ market with housing. Tune on at Nice 95.5 KBEK at 8 a.m. KBEK streams live at kbek.com. Hear recent shows at the podcast page at yoursafemoneyshow.com.