Concerns Over Retirement Taxes Rise Among Americans as Deadlines Approach
As the tax filing deadline approaches, concerns about the impact of taxes on retirement finances are growing among Americans. The Q1 2026 report from the Allianz Center for the Future of Retirement, affiliated with Allianz Life Insurance Company of North America, highlights a significant surge in these concerns.
According to the study, 70% of Americans express worries about income taxation during retirement, an increase from the previous quarter's 66%. Generation X shows the greatest concern, with 78% apprehensive about retirement taxes, a notable rise from 66% last quarter. In contrast, Millennials at 74%, Gen Z at 64%, and Boomers at 63% display lower levels of anxiety.
The study further indicates that 70% of participants are worried about the impact of future tax hikes on their tax-deferred retirement accounts, such as 401(k)s or IRAs. Gen X leads this concern with 80% expressing anxiety, followed by Millennials at 75%, Gen Z at 74%, and Boomers at 57%.
Strategies for Tax-Efficient Retirement Planning
Kelly LaVigne, Vice President of Consumer Insights at Allianz Life, advises considering how retirement savings in tax-deferred accounts will be taxed when retirement income begins. "One approach might be to diversify assets across various tax categories to reduce vulnerability to future tax changes," LaVigne suggests. For instance, a partial Roth IRA conversion allows for taxes to be paid upfront, enabling tax-free withdrawals later. He emphasizes consulting with financial or tax professionals to devise a tax-efficient withdrawal strategy for retirement.
The report also suggests that professional guidance on taxes is highly valued, with 62% stating they would discontinue using a financial advisor if they failed to provide strategic tax navigation.
Economic Concerns Among Gen X
Gen X not only worries about taxes but also holds a pessimistic view of the current economic climate. Only 25% believe it is a good time to invest, compared to 39% of Gen Z, 40% of Millennials, and 32% of Boomers. Gen Xers, more so than other generations, anticipate inflation worsening over the next year, which they fear could impact their retirement lifestyle.
The study finds that both Gen X (72%) and Millennials (71%) feel they need to save more for retirement but are hesitant to invest further due to market volatility. Among Gen Xers, 79% are concerned about the negative effects of continued market fluctuations on their long-term financial plans, a sentiment shared by fewer Millennials (74%), Gen Z (71%), and Boomers (59%).
LaVigne notes, "As Gen X approaches retirement, the effects of market volatility on their financial future become more pronounced. Despite increased worries, they can proactively plan by incorporating risk management strategies such as Defined Outcome ETFs or buffered annuities to guide them through these critical years."