Retirees who pay the most in taxes make only $36,000 a year on average, study finds

Retirees who have the most money pay the most taxes, according to a recently released working paper, but are not necessarily rich.
"Most of the tax burden comes from the top quintile of households," Anqi Chen, co-author and assistant director of savings research at the Center for Retirement Research at Boston College, told Yahoo Money. But "it's important to remember that when we think of the top quintile of households - the top 20% - they're not the super rich."
Read more: How to get your retirement savings going again
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Those in the highest quintile are mostly married couples with average combined social security benefits of $ 50,900, 401 (k) / IRA balances of $ 325,400, and financial assets of $ 441,400. When these assets and retirement accounts are annihilated, they make account holders about $ 3,000 a month - or $ 36,000 a year - and supposedly turn them into middle-income earners, Chen said.
"That's some money, but not a lot of money," said Chen, "and these households have to pay about 11% [tax]."
(Photo: Getty)
The top quintile pays 11.3% of his retirement income, while the top 5% is taxed at 16.4% and the top 1% is taxed at 22.7%. Overall, retired households pay 6% of federal and state taxes on their income.
The researchers used income data from 3,419 people and 1,907 households included in the Health and Retirement Study, a nationally representative longitudinal survey of older Americans. The analysis assumes that retirees meet the minimum distributions required on their retirement accounts and only consume interest and dividends from their assets.
Read More: Ask The Expert: How To Build An Emergency Fund After The Pandemic
The high tax burden on wealthy retirees shows that even those entering their golden years with the most money are still low on savings, an ongoing problem for many Americans. About 40% of the top quintile of savers are at risk of maintaining their standard of living, which means that "taxes make reaching the goal even more difficult," the study says.
For the majority of retired households, "taxes are negligible," said Chen, paying 0% to 1.9%. But they are far from lucky.
Those in the "bottom two-thirds of the income distribution do not have much financial wealth" who have material income in retirement, she added.
The Yahoo Money sister site Cashay has a weekly newsletter.
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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