Lawmakers are considering legislation that would delay eligibility for full Social Security benefits until age 70 for millions of young Americans.

Today the full Social Security benefit retirement age is 66 for people born between 1943 and 1954.  It gradually increases by 2 months per birth year until reaching age 67 for those born in 1960 or after.

I’m only 33, so if the retirement age is delayed to age 70 I will certainly be affected.  But you know what?  I think I’m ok with it.

Let’s face reality.  The Social Security program is in serious trouble.  According to the Trustees Report, the Social Security trust fund is scheduled to run out by 2037, at which point there will only be enough taxable income to pay about 75% of scheduled benefits.

It’s obvious that something needs to be done, and since life expectancy is much higher today than it was back in FDR’s day it makes sense that the retirement age is adjusted accordingly.

But I don’t think that’s enough.  I’d also like to see an increase in the taxable maximum.

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $106,800 (in 2010), while the self-employed pay 12.4 percent.  So if you make less than the taxable maximum your entire salary is taxed.  But if you make more than that, anything over the maximum is not taxed.

I’ve never really understood why the burden of paying for Social Security was almost entirely on the shoulders of the working class.  Why should a middle class worker making $106,800 pay the same amount ($6,621.60) in Social Security taxes as LeBron James?

You don’t think the wealthy are collecting the Social Security benefits they’re entitled to?  Of course they are…they didn’t get wealthy by making poor financial decisions and leaving money on the table.

I say up the taxable maximum.  It will increase the amount of taxable income without devastating the middle class and working poor.  And it will help insure that Social Security benefits are still around for the people who need them most.

What are your thoughts?  Are you willing to push your retirement back a few years or pay more in taxes if you earn over the taxable maximum?

If you’re like most people you can expect to receive an annual tax return between $2,000 and $3,000.   While that’s not exactly a life-changing sum, it is enough to shore up your financial situation a bit if you use it wisely.

Here are 7 smart things you can do with your tax return:

1.  Start an emergency fund.   Most people don’t have an emergency fund and if you’re one of them you could be in trouble if you suddenly find yourself out of work.  Set aside your tax return to start an emergency fund or add to one you already have.

2.  Pay down your debt.   It may just be a drop in the bucket compared to what you owe, but your tax return can at least put a dent in your credit card debt.

3.  Make a principal-only payment on your mortgage.   If you can manage to do this annually you’ll pay off your mortgage years early and save thousands of dollars in interest.   Just make sure your lender applies the entire amount to principal.

4.  Start a college fund for your kids.  Face it…college isn’t cheap and it’s getting more and more expensive every year.   Take your tax return and open up a 529 plan to help pay those expenses when your little ones are older.

5.  Sock it away for retirement.    Open up an IRA account for you or your spouse (or both) and deposit your tax return so it can grow until you’re ready to retire.

6.  Use it to improve yourself.   Take a class and learn something new.  It’s important to invest in yourself…improve your skills, make yourself more marketable and increase your earning power.

7.  Send it to me as a gift! Just kidding…I’m sure I could put your tax return to good use but you’re better off using it to improve your own financial situation.

Months ago my town announced they had commissioned a reassessment of all property values within the city limits.  Every property in town would be appraised and everyone’s property taxes would be adjusted based on the revised assessment.

The total amount of property taxes collected by the town would stay the same, only our individual shares would be increased or decreased based on our new property values. 

Needless to say I was a little nervous when I learned that our property value had increased from $146,000 to $278,000.  How much was this gonna cost me!

Well as it turns out I’m actually going to save a few bucks.  $961 to be exact! 

That’s right, after years of watching my property tax bill shoot up higher and higher I finally get to see a decrease from just under $9000 to just under $8000.   That’s still a lot compared to most of the country but in Northen New Jersey it is the going rate for a modest sized home.