There’s few things quite as exciting as seeing an automatic payroll deposit in your account that’s higher than you expected. I haven’t been on a traditional payroll for a few years so had forgotten how awesome it is to get a ~ 7% raise mid-year.
If you’re wondering when you’ll reach the the max annual employee contributions – on CPP the max is $2,306.70 and the max on EI is $839.97 in 2012.
OUCH! The American maximum SSI tax is a little more painful than Canada’s with the maximum calculated on up to $110,100 in salary. Much harder to get a mid-year raise there!
Anyway, there’s an extra $1,000+ a month to go into savings – apart from last month where I spent most of it on a couple of weeks of sleep-over camp for the little guy this summer (he thought it was too pricy but I insisted - I’ll just work more those weeks that he’s gone – and as a contractor, I get paid 1.5 OT – woot! Or bank it…) It’s just nice that it didn’t affect the regular “pay yourself first” savings.
A few interesting tidbits about CPP:
- the maximum payout (in 2012) is $986.67
- you have to work 40 YEARS to get the max payout (oops, guess I won’t get there)
- the average payout is about 50% of the maximum or $527.96 (maybe get there)
Here’s a couple of good articles on retirement and savings and why you don’t have to save as much as you think:
So what do you do with your “raise”? Spend it? Save it? Pay off debt? Or a bit of everything?