6 Ways Retiring Can Be More Affordable
Retirees have a broader array of tax savings and a historically low income-tax rate. Managing retirement is way more complicated for retirees than it was when company pensions provided a simple solution. But on balance, it’s less taxing. According to the Tax Foundation, the average U.S. income tax declined to 11 percent in 2010 from 15 percent in 1985, and people over 65 are among the most lightly taxed. The Social Security Administration says half of Social Security recipients pay no taxes on their U.S. pensions. There are tax benefits ranging from estate tax treatment ($5 million exempted, per person) to capital gains on homes ($250,000) to workplace plans.