Retirees Tax Struggle Survey Insights

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover how retirees struggle with taxes and learn effective retirement planning strategies. Explore safe money alternatives today! Woulda. Coulda. Shoulda. That is how a surprising number of retirees feel about their tax planning. In a recent study by Nationwide Retirement Institute, staggering proportions of retired Americans wished they had done more to prepare for their sometimes-surprising tax bills. Over the course of the “ Retirement Income and Tax Planning Consumer Survey ,” researchers asked people in different life stages about their preparedness for paying taxes in retirement. The survey was revealing. An estimated 60% of future retirees, 70% of recent retirees, and 75% of those retired for more than 10 years said they are only “somewhat knowledgeable” or “not at all knowledgeable” about tax planning in retirement. That’s right. Three of every four people retired for at least a decade still admit to feeling less than certain about planning for taxes in retirement . The Impact of Ignoring Planning for Taxes Counting those in all stages of retirement, 37% admitted they hadn’t considered how taxes would impact their retirement income. As a result, the report concludes, these people may have lost the opportunity to save an amount that could equal an additional six years of retirement income. Taxes are a much bigger issue than many people may believe. Nearly one out of every three dollars spent by high-income retirees goes to taxes, according to a survey by Lincoln Financial Group. The survey polled people ages 62 through 75, having household incomes greater than $100,000. While many would find it hard to face unexpected expenses, unfortunately being caught off guard at tax time is not uncommon for retirees. The NRI study found that 27% of older Americans say they owe additional taxes each year. Those who have been retired for 10-plus years were the least likely to receive a tax refund each year at just 29%. In all age ranges of the NRI survey’s respondents, who were age 50 and older, 1 in 4 reported that they have paid several thousand dollars more in taxes than they anticipated. Naturally, they would have preferred to hold onto more of their money rather than seeing it siphoned off in taxes. In Control, But Still Confused The NRI