Low-income Americans are more likely to worry about rising taxes than their wealthy counterparts, according to research released Thursday by The Hartford. Americans who make less than $50,000 per year are more likely to be concerned about taxes than those who make more than $100,000 per year. Middle-income Americans have the lowest level of concern.
Despite reporting that they're worried about the effect of increased taxes, low income Americans are also less likely to participate in 401(k)s or other tax-efficient retirement plans. The report also found inflation and market volatility to be top concerns.
Tom Foster, vice president and national spokesperson for The Hartford's retirement plans, suggested Americans take advantage of tax-efficient savings plans like 401(k)s and Roth IRAs. He also stressed the importance of taking advantage of an employer's company match, and the Saver's Credit provided by the IRS, which provides up to $1,000 for individuals and $2,000 for couples who contribute to an employer-sponsored retirement plan.
"Advisors need to understand the various opportunities available, and to work with plan sponsors so they can take those opportunities to participants," he told AdvisorOne. "I'm on the road constantly to educate advisors so they understand the issues."