How the Income Tax Treatment of Saving and Social Security Benefits May Affect Boomers' Retirement Incomes
Center for retirement research at Boston College, March 2008
Income tax provisions affect the buildup of retirement assets during
workers’ careers and after-tax income following retirement. This paper
uses the Urban Institute’s DYNASIM model to simulate how potential
changes in the tax treatment of retirement saving, Social Security
benefits, and income from assets outside of retirement accounts may
affect boomers’ retirement incomes. Results show that changes in the
income thresholds for taxing Social Security benefits have the largest
impact on middle-income boomers, while changes in contribution limits
for retirement saving plans and tax rates on capital gains and
dividends have the largest impact on the highest income boomers.
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