Middle income Baby Boomers would be less likely to save for retirement if taxes were increased or if tax incentives for retirement savings were reduced or eliminated.
According to a new study by the Insured Retirement Institute, tax deferral is among the most important considerations when Baby Boomers, especially those at middle income levels, evaluate a retirement investment.
"Middle-income Boomers, who make up the majority of annuity owners, overwhelmingly show that they value and utilize tax-deferred retirement savings vehicles," IRI President and CEO Cathy Weatherford said.
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"Our consumer research found that tax policy changes would have negative consequences for retirement savings, with about a quarter of middle-income Boomers likely to curtail their retirement savings if tax deferral is reduced or eliminated. Policy coming out of Washington must seek to encourage retirement savings—not discourage it. As saving for retirement is becoming more and more challenging, now is the time to protect the incentives that are helping Americans attain financial security during their later years."
When it comes to tax policy changes, according to the January survey of Americans aged 50 to 66, 58 percent of middle-income Boomers are likely to cut back on retirement savings if income taxes are increased, 40 percent if Social Security payroll taxes are increased, and 29 percent if capital gains taxes are increased.
The IRI report found that 74 percent of all Boomers consider tax deferral to be an important feature when selecting a retirement investment and about one in five consumers cited tax-deferred growth as the primary reason for owning an annuity. Among middle-income Boomers, 77 percent said that tax deferral is an important consideration when selecting a retirement product.
The Insured Retirement Institute (IRI) is a not-for-profit organization that for twenty years has been a mainstay of service, commitment and collaboration within the insured retirement industry.
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