We may not like seeing those deductions on
our paychecks, but they serve a valuable role.
It was 43 years ago that I got my first “real” job working in a photo development plant on weekends cleaning chemical tanks. My pay was $1.60 per hour. That’s not a misprint; it was the minimum wage at that time. I was very excited to get my first real paycheck. In the past, I had worked mowing lawns and shoveling snow. This was to be a real working man’s paycheck.
It was simple math: 10 hours at $1.60 per hour – I should get $16.00. Imagine my surprise when my check was less, due to federal and state taxes and something called FICA.
“What are all these deductions?” I wondered. “And what is FICA?” It was easy to understand federal and state taxes, but taking money for my retirement? I was 17 years old – ludicrous, I said!
Fast forward 43 years, and I’ve done a 180: I love deductions! Find out why…
Jeffrey Hemker is Invesco’s National Sales Manager, Retirement Division.
Invesco Distributors, Inc. 08/16
