Retired tax adviser says pre-retirees should plan for higher taxes to protect their savings
MCKINNEY, TX/ACCESSWIRE/November 1, 2022/ Many Americans dream of the day when they can retire, but American workers are retiring at a later age than those of the last three decades, according to a recent study. Gallup poll. The average reported retirement age is 61, up from 57 in 1991, according to Gallup’s annual survey of economics and personal finance. This postponement of retirement could be linked to the worries of baby boomers about their finances.
Based on an at any time estimate of retirement finances investigation out of 1,000 non-retired Americans, the median amount baby boomers have saved for retirement is just $112,000. That’s just 39% of the $286,000 investment experts say they should have in the bank by age 60. The survey also found that 62% of Americans with retirement savings spent some of it during the pandemic. About 1 in 6 – or 16% – have spent $15,000 or more from their retirement fund.
The survey’s most concerning findings are that around 80% of people expect their standard of living to decline in retirement, while 10% fear they won’t be able to retire at all.
David Hyden, president and founder of Retirement Tax Advisers and Safe Secure Planning, said that as the Federal Reserve continues to raise interest rates to fight inflation, the pressure to borrow increases, including the cost servicing the $31 trillion national debt. Ultimately, this will affect retirees’ ability to save and build their investment portfolio.
“Most people are completely unaware of what’s going on behind the scenes in our country’s economy,” Hyden says. “Marginal tax rates are expected to rise significantly over the next ten years; as baby boomers continue to retire and then Generation X after them, we will see the two groups most likely to see their retirement lifestyle affected. As a result, many retired people could be caught off guard and suffer financially.”
Hyden says that as tax rates rise, American workers can focus on key strategies that will reduce their future tax liabilities. He says that when setting financial and retirement goals, pre-retirees who factor in stock market volatility, tax increases and inflation can strategically minimize the erosion of wealth.
For those who are young, retirement tax advisers recommend saving more and earlier – as well as investing in long-term assets while budgeting for costs now. Recent research from Market Watch shows that millennials started saving earlier than baby boomers and have around $70,000 in retirement savings, putting them on track to reach the $107,000 that investment experts say they need in 40 years.
“Most investment advisers and accountants focus almost exclusively on reducing taxes in the current year,” Hyden says. “But you have to analyze the long-term consequences in retirement when you’re talking about portfolio accumulation. Having a strategy to minimize your future tax liability could make the difference in the quality of your retirement, your legacy, and ultimately whether you run out of money.”
ABOUT RETIREMENT TAX ADVISORS, LLC
Retirement Tax Advisers and Safe Secure Planning is led by a seasoned retirement consultant, Certified Financial Fiduciary (CFF®) and National Social Security Advisor (NSSA®) who also holds a College Finance Advisor Certification from The College Authority and is co-author of the best-selling book Crash proof wealth. Unlike investment advisors or CPAs, retirement tax advisors offer tax strategies to minimize taxes in retirement and your overall future tax liability – which can make the difference in the quality of your legacy, your livelihood and your retirement in general. For more information, visit https://retirementtaxadvisers.com/.
CONTACT INFORMATION
david hyde
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469-342-8889
THE SOURCE: Retirement Tax Advisors, LLC
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