Retirement, Saving and Your Taxes
Just one in four of the low-income workers eligible for the federal tax credit for retirement saving are even aware that it exists.
The IRS, as I said in a previous blog, practically “gives money away” through its Saver’s Tax Credit, which returns as much as half of the amount saved to the tax filer. The credit was designed to encourage the nation’s lowest-paid workers, who largely don’t save.
Yet a survey last year by the Transamerica Center for Retirement Studies found that people who are not eligible for the credit know more about it than people who are eligible. There was a pervasive lack of awareness in three groups in particular: workers earning under $50,000, women, and people with no more than a high school education.
We’re getting into the thick of the tax season, so we’ve assembled a list of our previous tax-oriented blogs – the first article explains the saver’s credit. The blogs, listed below, explore a variety of issues to consider when you’re doing your taxes:
- Retirement Tax Credit for Low Earners – how the Saver’s Tax Credit works.
- 401(k) Catch-up: Help for the Few – most taxpayers over age 50 don’t take advantage of their special deduction but should.
- Navigating Taxes in Retirement – a primer.
- Retirees’ Tax Puzzle: Pay Now or Later – a tax expert explains how to balance taxation of 401(k) withdrawals now with taxation of the required minimum distribution (RMD) that will hit at age 70.
- Why Most Elderly Pay No Federal Tax – the tax code contains many special provisions for the elderly.
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