Only 2% of Americans Can Identify Financial Solutions With Tax Advantages, Despite One-Third Wanting to Prioritize These Investments
07 Marzo 2023 - 7:11PM
Business Wire
Company shares five tax-efficient strategies to
consider as part of a holistic financial plan
As consumers focus on filing their taxes and spending those
returns, a new study reveals a need for increased awareness around
tax-efficient financial strategies. Lincoln Financial Group’s
Consumer Sentiment Tracker reports that only 2% of Americans can
correctly identify financial solutions with tax advantages, despite
one in three saying they prioritize investments that would help
them pay less in taxes either now or in the future.
“Lincoln’s research shows consumers are under-educated about tax
strategy and tax-efficient investments, revealing a disconnect
between aspirations and actions,” said David Berkowitz, president,
Lincoln Financial Network - the wealth management arm of Lincoln
Financial Group that provides advice and guidance through its
extensive network of independent financial professionals.
“There is a real opportunity for our industry to help simplify
these products and solutions so that Americans can feel more
confident making the right financial decisions for themselves and
their loved ones.”
Lincoln Financial Group recommends the following five
tax-efficient strategies that can be considered as part of a
holistic financial plan:
- Contribute to a workplace retirement account. Pretax
contributions to a retirement savings plan offered through one’s
employer will reduce total taxable income and allow savings to grow
tax deferred. A good rule of thumb is for consumers to save at
least 10% to 15% of their pay, but if that feels out of reach,
start wherever possible and try increasing contributions by a
little each year to see big changes in total savings over time.
Remember to save up to the employer match, if offered.
- Explore the value of lifetime income. At a time when
people are living longer and face greater risks to their savings,
an annuity is an investment solution that can provide pre-retirees
with guaranteed monthly income that’s protected and can last a
lifetime. Taxes on the gains aren’t paid until the money is
withdrawn, so interest can be earned on the money that would have
otherwise been paid in taxes. If people are in a lower tax bracket
during retirement, that means potentially paying less in taxes
overall on the same amount of money. A financial professional can
help determine which type of annuity might be best for individual
needs, preferences and income planning goals.
- Prepare for unexpected long-term care costs. The
greatest changes to income and lifestyle may result from an
unexpected long-term health care event. Different solutions can
help provide a cushion, and many of these benefits are income
tax-free. Understanding the various policies is the first step in
helping prepare for the future to ensure receiving needed care
without passing a financial burden on to family or loved ones.
- Diversify a portfolio with life insurance. Adding cash
value life insurance to a portfolio can help protect consumers’
savings and provide an income tax-free death benefit for their
beneficiaries, as well as tax-deferred growth opportunities. As
part of a larger financial plan, life insurance benefits can also
offer advantages that help meet goals at every stage of life,
including funding a child’s education costs; strengthening
retirement savings; creating additional cash flow; and helping to
protect wealth for future generations. If loans or withdrawals are
taken, it will reduce the death benefit and other values, as well
as have potential tax consequences.
- Work with a financial professional. According to
Lincoln’s study, just 1 in 5 U.S. adults feels very confident about
making financial decisions to minimize exposure to taxes, yet
nearly half (47%) say they are more concerned about the impact of
taxes on their retirement savings as a result of the current
market. A financial professional can help tailor a holistic plan to
one’s specific needs, as well as provide education about various
insurance and retirement solutions.
“Ongoing challenges like market volatility, inflation and
changing tax laws have the potential to hit us all hard in the
wallet,” said Berkowitz. “That’s why tax-efficient investing is an
especially important aspect of financial planning that can help you
build wealth and achieve your financial goals.”
Visit www.lfg.com for more tools and resources.
Consumer Sentiment Tracker 2022 Methodology
The goal of this research is to gauge consumer sentiment on a
variety of financial topics. Data was collected in March, April,
May, June, July, September, October, and November 2022 using the
Qualtrics survey platform. Responses were collected from a total of
1,000+ U.S. adults each month. The sample included quotas to be
representative of the total U.S. adult population.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help
people take charge of their financial lives with confidence and
optimism. Today, approximately 16 million customers trust our
retirement, insurance and wealth protection expertise to help
address their lifestyle, savings and income goals, and guard
against long-term care expenses. Headquartered in Radnor,
Pennsylvania, Lincoln Financial Group is the marketing name for
Lincoln National Corporation (NYSE:LNC) and its affiliates. The
company had $282 billion in end-of-period account values as of
December 31, 2022. Lincoln Financial Group is a committed corporate
citizen included on major sustainability indices including the Dow
Jones Sustainability Index North America and FTSE4Good and ranks
among Newsweek’s Most Responsible Companies. Dedicated to
diversity, equity and inclusion, we are included on transparency
benchmarking tools such as the Corporate Equality Index, the
Disability Equality Index and the Bloomberg Gender-Equality Index.
Committed to providing our employees with flexible work
arrangements, we were named to FlexJobs’ list of the Top 100
Companies to Watch for Remote Jobs in 2022. With a long and rich
legacy of acting ethically, telling the truth and speaking up for
what is right, Lincoln was recognized as one of Ethisphere’s 2022
World’s Most Ethical Companies®. We create opportunities for early
career talent through our intern development program, which ranks
among WayUp and Yello’s annual list of Top 100 Internship Programs.
Learn more at: www.LincolnFinancial.com. Follow us on Facebook,
Twitter, LinkedIn, and Instagram. Sign up
for email alerts at http://newsroom.lfg.com.
Lincoln Financial Group® affiliates, their distributors, and
their respective employees, representatives, and/or insurance
agents do not provide tax, accounting, or legal advice. Please
consult an independent professional as to any tax, accounting, or
legal statements made herein.
Lincoln annuities and life insurance policies are issued by The
Lincoln National Life Insurance Company, Fort Wayne, IN, and
contracts sold in New York are issued by Lincoln Life & Annuity
Company of New York, Syracuse, NY; distributed by Lincoln Financial
Distributors, Inc., a broker-dealer. The Lincoln National Life
Insurance Company does not solicit business in the state of New
York, nor is it authorized to do so. Securities and investment
advisory services offered through other affiliates.
Annuities are long-term investment products designed for
retirement purposes and are subject to market fluctuation,
investment risk, and possible loss of principal.
Lincoln Financial Group is the marketing name for Lincoln
National Corporation and its affiliates. Affiliates are separately
responsible for their own financial and contractual
obligations.
LCN-5488059-022823
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version on businesswire.com: https://www.businesswire.com/news/home/20230307005925/en/
Media: Holly Fair Lincoln
Financial Group 484-583-1632 Holly.fair@lfg.com
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