|By PR Newswire||
|April 9, 2014 06:20 AM EDT||
CHICAGO, April 9, 2014 /PRNewswire/ -- A majority of our country's middle-income Boomers and retirees have significant gaps in their understanding of how federal taxes will impact their retirement finances, according to a new study released by the Bankers Life Center for a Secure Retirement ® (CSR).
In fact, today, more Americans have an accurate understanding of how lottery winnings are taxed (94%) than the mainstays of their retirement income: Social Security benefits (39%) and retirement accounts, such as traditional IRAs (35%), Roth IRAs (31%) and 401(k)s (29%).
The Retirement Tax Considerations for Middle-Income Americans study, which focused on 1,000 Americans ages 50 and older with an annual household income of between $25,000 and $75,000, found that respondents also share a dislike for doing taxes and filing their personal returns.
Tax Filing Assistance
When asked to choose which activity they disliked the most, respondents say that doing taxes (23%) is almost equally as disliked as the unpleasant experience of going through airport security (29%). In fact, getting a flu shot is preferable to doing taxes for many middle-income Americans over age 50.
However, when it comes to completing and filing their annual tax returns, only four in 10 (38%) work with a tax preparer. More than half (54%) prepare and file their own tax return, with one in three (31%) using tax-preparation computer software. Nearly one in five (18%) complete their tax returns on their own without any external advice or guidance.
Retirement Account Guidelines and Penalties
401(k) plans and traditional IRAs are a popular way to save for retirement but a large percentage of older Americans are unaware that significant tax penalties apply when rules governing these accounts are not followed. More than half (57%) do not know that 70½ is the age at which required minimum distributions from traditional IRAs and 401(k) plans must begin.
Furthermore, a majority of the respondents are unaware that in certain circumstances they may be able to withdraw funds from a traditional IRA without penalty. Among the exceptions are:
- To pay for health insurance while unemployed
- To pay for college expenses
- To buy a home
- To pay for medical expenses
Only 2% of respondents were aware of all four exceptions.
Claiming all eligible deductions and dependents is a common way to reduce an individual's total tax burden. However, most middle-income Americans age 50 and older cannot identify many of the tax deductions potentially associated with retirement.
- 56% do not know that blindness is cause for a higher standard deduction
- 68% cannot correctly identify 65 as the age at which a higher standard deduction is granted
- 90% are unaware that, in some cases, they may claim their parents living outside the household as their dependents for tax purposes
"Many people focus on building their retirement savings without considering the role of taxes once they are retired," said Scott Goldberg, president of Bankers Life. "Make tax planning a part of any retirement planning discussion and talk to a qualified tax professional who can help ensure you claim all applicable tax deductions and credits, this year and in the future."
The research for this report was conducted in February 2014 for the Bankers Life Center for a Secure Retirement by the independent research firm The Blackstone Group. The full report can be viewed at CenterForASecureRetirement.com.
A nationwide sample of 1,000 Americans ages 50 and older, who have an annual household income of between $25,000 and $75,000, participated in the internet-based survey on questions relating to federal taxes. The margin of error is +/-3.1 percentage points at the 95% confidence level.
About the Center for a Secure Retirement
The Bankers Life Center for a Secure Retirement is the Company's research and consumer education program. Its studies and consumer awareness campaigns provide insight and practical advice to help everyday Americans achieve financial security in retirement. To learn more, visit CenterForASecureRetirement.com.
Bankers Life products focus on the insurance needs of the middle-income retirement market through nationwide subsidiaries of CNO Financial Group, Inc. (NYSE: CNO). These companies offer a broad portfolio of life and health insurance designed especially for those near or in retirement. To learn more, visit BankersLife.com.
SOURCE The Bankers Life Center for a Secure Retirement
Aug. 29, 2015 10:30 AM EDT
Aug. 29, 2015 10:15 AM EDT Reads: 407
Aug. 29, 2015 09:30 AM EDT Reads: 836
Aug. 29, 2015 09:30 AM EDT Reads: 426
Aug. 29, 2015 09:15 AM EDT Reads: 151
Aug. 29, 2015 08:45 AM EDT Reads: 569
Aug. 29, 2015 08:45 AM EDT Reads: 164
Aug. 29, 2015 08:00 AM EDT Reads: 128
Aug. 29, 2015 07:45 AM EDT Reads: 549
Aug. 29, 2015 07:45 AM EDT Reads: 117
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, discussed why containers should be paired with new architectural practices such as microservices rathe...
Aug. 29, 2015 06:00 AM EDT Reads: 370
U.S. companies are desperately trying to recruit and hire skilled software engineers and developers, but there is simply not enough quality talent to go around. Tiempo Development is a nearshore software development company. Our headquarters are in AZ, but we are a pioneer and leader in outsourcing to Mexico, based on our three software development centers there. We have a proven process and we are experts at providing our customers with powerful solutions. We transform ideas into reality.
Aug. 29, 2015 05:45 AM EDT Reads: 503
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
Aug. 29, 2015 05:30 AM EDT Reads: 342
Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is designed for their business. In 2015, organizations such as United Airlines, Sony...
Aug. 29, 2015 05:00 AM EDT Reads: 405
Puppet Labs has announced the next major update to its flagship product: Puppet Enterprise 2015.2. This release includes new features providing DevOps teams with clarity, simplicity and additional management capabilities, including an all-new user interface, an interactive graph for visualizing infrastructure code, a new unified agent and broader infrastructure support.
Aug. 29, 2015 03:00 AM EDT Reads: 473