With Tax Day quickly approaching on April 15, Americans report feeling anxious over how taxes will impact their long-term finances in retirement.
The Q1 2026 Quarterly Market Perceptions Study from the Allianz Center for the Future of Retirement found that 70% of Americans are concerned about taxes on their income in retirement, up from 66% last quarter.
Specifically, Americans said they felt distressed over how higher taxes in the future could diminish retirement income from their 401(k)s and individual retirement accounts (IRAs), with 80% of Generation Xers, 75% of Millennials, 74% of Generation Zers, and 57% of Baby Boomers all sharing this concern.
Worried consumers can look to strategies that avoid higher taxes during retirement, like partial Roth IRA conversions, says Kelly LaVigne, vice president of consumer insights at Allianz Life.
“If you have saved for retirement in tax-deferred accounts, it can be helpful to think through how your retirement savings will be taxed when you start taking income in retirement,” she said. “One strategy can be to spread your assets across various tax asset classes to potentially minimize your exposure to future tax changes. A partial Roth IRA conversion can help by paying taxes on assets now so those funds can be withdrawn tax-free later. A financial or tax professional can help you create a tax-efficient withdrawal strategy to put the most money in your pocket for retirement spending.”
Working with a financial professional could add further support, as 62% of respondents say they would quit receiving guidance from an advisor if it “didn’t help them navigate the current tax environment strategically.”
Concerned sentiments were particularly shown in Gen X respondents, with 78% displaying trepidations over taxes with retirement income—also an increase from 66% in Q4 2025. A sizable chunk of Millennials also reported worries, at 74%, while Gen Zers and Baby Boomers were slightly less likely to note these concerns, at 64% and 63%, respectively.
Gen Xers, who face caregiving concerns, day-to-day costs, and financial anxieties as they prepare for retirement soon, reported feeling the least optimistic with the current economic environment out of all groups. Just a quarter of this generation believe now is a “good time” to invest in the market, compared to 39% of Gen Z, 40% of Millennials, and 32% of Boomers.
Further, while this group believes they will need to accumulate more savings for retirement, they were also likelier to report feeling “too nervous” to invest more, at 72% of this generation. Another 79% reported concerns over the impact continued market volatility could have on their long-term financial plans.
Gen Xers were also the most likely to believe inflation will worsen over the next 12 months and say the increased cost of living will prevent them from leading the life they want in retirement.
“Gen X is approaching the years before retirement when risks like market volatility can have an outsized effect on their long-term financial outlook,” LaVigne says. “While that time can come with increased worry, Gen Xers can use that anxiety to fuel action in preparing a retirement strategy that incorporates risk management solutions, such as Defined Outcome exchange-traded funds (ETFs) or buffered annuities, to serve as a guide in the years ahead.”