1 in 5 Americans were forced to delay their retirement: here’s why

The coronacrisis has significantly impacted taxes in the US

retirement US

1 in 5 Americans were forced to delay their retirement: here’s why. Source: pexels.com

2021 Tax-Efficient Retirement Income survey has unveiled that 1 in 5 Americans will delay their retirement or no longer retire at all.

The study also found 27% of the respondents have saved less or stopped saving for retirement because they lost their job or for other reasons. As a result, nearly 37% have or are likely to withdraw money from their retirement plan early because of the pandemic. In fact, this percentage is even higher for millennials at 58%.

In general, the research highlighted that younger adults have struggled with navigating their finances the most. For instance, 62% of millennials and 51% of Gen Xers said the pandemic has made their finances more complicated, compared to 27% of boomers.

COVID-19 has many Americans feeling financially insecure — especially younger ones. This presents an opportunity for financial professionals to not only get clients back on track, but ensure they have the right tools and education on topics like taxes in retirement, which can get them closer to their long-term goals
Eric Henderson, president of Nationwide's Annuity business

Besides, the coronacrisis has put a needed spotlight on the critical role tax planning plays in reaching those long-term goals. This way, nearly half of Americans expect their taxes to go up significantly in the next 4years. Meanwhile, 62% agree it’s more important than ever to minimize taxes now than in retirement.

In fact, 42% of retirees didn’t consider how tax rates would affect their retirement income when planning for retirement. As a result, now 36% are afraid of what tax rates will do to their retirement income.

Besides, 42% of all respondents revealed that COviD-19 made their taxes more complicated, and this figure jumps to 58% for millennials.

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