Those Most Worried about Rising Taxes not Saving in Retirement Plans
At the same time, this group is less likely to participate in a 401(k) or other retirement plans that could reduce their taxes or provide tax-free income.
According to a press release, The Hartford’s 2011 Taxes and Investment Study found rising taxes were cited as the biggest investment concern by 37% of respondents with annual incomes below $50,000, followed by inflation and market volatility. By comparison, only 28.5% of those with middle incomes (from $50,000 to $100,000) and 32% of those with high incomes (more than $100,000) were as worried about taxes.
People with modest means were also considerably less likely to contribute to a 401(k) or similar retirement plan than higher-income Americans, and were similarly less likely to invest in equities or bonds typically found in IRAs, variable annuities or other retirement savings vehicles, the study found.
“Rising taxes can have a bigger impact on Americans with lower incomes, so they are understandably more concerned about that possibility,” said E. Thomas Foster Jr., vice president and national spokesperson for The Hartford’s retirement plans, in the press release. “The Hartford is working with employers that sponsor retirement plans to help educate employees about opportunities to reduce their tax bills, defer taxes on their investment earnings or generate tax-free income.”« Australians Want Increase in Company Mandatory Retirement Contributions