How Will Higher Tax Rates Affect the National Retirement Risk Index? | Center for Retirement Research

How Will Higher Tax Rates Affect the National Retirement Risk Index?

Alicia H. Munnell Anthony Webb Francesca N. Golub-Sass

IB#10-19

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.