Many Americans concerned about impact on retirement
Americans looking ahead to retirement are becoming increasingly concerned that the possibility of higher taxes in coming years will make it more difficult to plan for their future.
An April 2021 Gallup survey found 57% of Americans expect their taxes will be higher during the next 12 months, with only 33% anticipating they will remain the same. Recent Harris polling on behalf of the Nationwide Retirement Institute (NRI) revealed similar trends. NRI stated, “Almost half (47%) of Americans expect their taxes to go up significantly in the next four years and the majority (62%) agree it’s more important than ever to minimize taxes now than in retirement.”
“I think one of the major areas that we should all be concerned with is the possibility of rising taxes,” Michael M. Quarles, owner and president of Financial Longevity Advisory LLC in Kansas City, Missouri, told Advisors Magazine. “Taxation in retirement has always been a concern for us. There have been numerous changes in tax policies over the years with different laws, different administrations, and different perspectives impacting future results.”
For several years, Quarles noted, the United States has faced rising national debt, higher baby boomer retirements, and record numbers of people enrolling for Medicare and Social Security benefits. On top of those pressures, he added, trillions of dollars have been spent over the past 18 months to counteract the coronavirus pandemic. Government expenditures have heightened concerns over how much taxes may rise and how the country will recover economically.
“For these reasons, it is important for us to address taxes in our financial and retirement planning,” Quarles said and added that while he does not provide tax advice, he works with a client’s tax professional when requested. “Many of our strategies, educational efforts, and general information focus on that aspect. Most of our clients have a large percentage of funds in retirement accounts, where that money is tax-deferred. But at some point in the future, tax rates will be applied when those funds are distributed – and there are many different ways that taxes can increase over time.”
Quarles said his niche is working with older clients who are approaching retirement, which today largely means baby boomers. He said his firm takes a holistic approach with each client that encompasses retirement planning, income planning, and financial planning.
“More people have become concerned about living too long and outlasting their money,” he said. “Longevity, or the risk of living longer, has a lot to do with that. The financial risks of market downturns, long-term care costs, and taxation are also big concerns to people, and they always have been.”
Education plays an important role by providing information that helps people deal with those concerns, he continued. Change is a constant challenge for long-time clients and new prospects alike. Lifestyles and family situations change, as do the economy and the financial products available.
“During the time I’ve been in business,” Quarles added, “the information aspect of our industry has really been our foundation. Most people want answers to their questions, and they want to know more about their situation. That’s how we can help: it’s all about providing the education and information that people are seeking.”
For more information on Financial Longevity Advisory, LLC, visit fladvisoryllc.com.
Michael Quarles and Heather Herring offer Investment Advisory Services through Gradient Advisors, LLC (Arden Hills, MN 877-885-0508), an SEC Registered Investment Advisor. Gradient Advisors, LLC and its advisors do not render tax, legal or accounting advice. Financial Longevity Advisory LLC is not a registered investment advisor and is independent of Gradient Advisors, LLC. Insurance products and services are offered through Michael Quarles and Heather Herring, independent agents.
Financial Longevity Advisory LLC , Michael Quarles, Heather Herring and Gradient Advisors, LLC are not affiliated with or endorsed by the Social Security Administration or any government agency.
