How Will Higher Tax Rates Affect the National Retirement Risk Index?
The brief’s key findings are:
- Increased taxes and spending cuts will be needed to bring the federal budget under control.
- Relying heavily on tax increases would modestly raise the overall NRRI (the percent of households ‘at risk’ in retirement) from 51 to 54 percent.
- But the NRRI would jump sharply for high-income Early Boomers, who face sharply higher income taxes and have little time to adjust.
- And while Gen Xers would see little change in their ‘at risk’ status, higher taxes would reduce their consumption both before and after retirement.