Gen X Leads as the Most Worried About Taxes in Retirement
The latest quarterly market perception survey released this week puts a sharp spotlight on retirement tax anxiety. A nationwide poll conducted in February 2026 shows that 70% of Americans are worried about taxes on income in retirement, up from 66% in the prior quarter. The uptick is driven largely by Generation X, which now stands out as the most worried about taxes among major age groups.
In the study, Gen X respondents reported that 78% are concerned about taxes on income in retirement, a sizable jump from 66% just three months earlier. Millennials are close behind at 74%, while Gen Z and Baby Boomers register 64% and 63%, respectively. The pattern underscores a widening fear that tax policy changes could erode retirement cash flow for those born roughly between the mid-1960s and early 1980s.
Beyond income taxes, the survey finds a broad worry about the future tax bite on retirement savings. Seven in ten Americans fear higher taxes could erode income from tax-deferred accounts such as 401(k)s and IRAs. Again, Gen X leads the concern with 80% worried about taxes on retirement income from these accounts, compared with 75% of Millennials, 74% of Gen Z, and 57% of Boomers.
As the calendar flips toward tax day, the numbers reinforce a simple takeaway: the most worried about taxes are not merely worried about today’s rates, but about the long-term path of taxation and how it will affect retirement spending once they stop working.
What the numbers say about the risk landscape
The Allianz Life Insurance Company of North America study—part of the Allianz Center for the Future of Retirement—collected responses online in February 2026 from a nationally representative sample of 1,005 adults age 18 and older in the contiguous United States. The results illuminate a risk landscape where tax policy, inflation, and market swings collide for would-be retirees.
- Overall concern about taxes on retirement income: 70%.
- Gen X concern about retirement income taxes: 80%.
- Tax-deferred accounts under scrutiny: 70% fear higher taxes could erode withdrawals.
- Generational split on tax worry: Gen X leads, followed by Millennials (74%), Gen Z (64%), Boomers (63%).
Kelly LaVigne, vice president of consumer insights at Allianz Life, emphasized that this trend is not just about current rates. She noted that savers with money in tax-deferred plans should map out how withdrawals will be taxed in retirement. A tax-efficient withdrawal strategy can help preserve spendable income when it matters most, she said, though the path varies by individual bracket dynamics and asset mix.
LaVigne pointed to practical steps retirees can consider. Diversifying withdrawals across different tax buckets is one approach to reduce exposure to future tax changes. For some savers, a partial Roth IRA conversion may make sense now, paying taxes on a portion of assets so future withdrawals can be tax-free. She cautioned that this is highly personal and should be designed with a tax or financial professional who understands each saver’s timeline and income needs.
The study also highlights an evolving advisor role. Americans appear to want more proactive tax guidance from their financial professionals. About 62% of respondents indicated they would consider leaving their current advisor if the advisor did not help navigate tax implications, signaling a clear demand for tax-aware planning as markets wobble and policy risk remains in focus.
Implications for retirement planning and loan decisions
The rise in concern about taxes and inflation is shaping decisions beyond investment allocation. For individuals nearing retirement, how they fund retirement spending—whether through withdrawals, loans, or home equity—could hinge on how tax liabilities are managed.
In the loan space, this anxiety translates into heightened scrutiny of liquidity options and debt versus tax efficiency. Home equity lines of credit (HELOCs), cash-out refinances, and reverse mortgage products may be viewed through a tax lens as retirees balance the need for cash with the goal of keeping tax-advantaged accounts intact for as long as possible. Lenders may notice more inquiries from Gen X borrowers who want flexible, tax-aware funding paths to bridge gaps before distributions begin from tax-deferred accounts.
Financial institutions that frame their loan and advisory products around tax efficiency may gain traction. Banks and insurers are responding with tools designed to help clients stress-test withdrawal scenarios under different tax regimes and inflation scenarios. For now, the core message is clear: the most worried about taxes are seeking clarity on how future tax policy will shape their retirement cash flow, and they want advisors who can translate complex tax rules into actionable plans.
Strategies advisors say can help protect retirement income
Retirees facing the prospect of higher taxes in retirement should consider a multi-pronged approach. A tax-aware withdrawal plan can help stretch savings and reduce the risk of tax-rate surprises in later years. Key ideas include:
- Tax diversification: Maintain a mix of taxable, tax-deferred, and tax-free accounts to draw income in a way that minimizes overall tax liability each year.
- Partial Roth conversions: Convert a portion of tax-deferred assets when tax rates are favorable, with the aim of tax-free growth and withdrawals later in retirement.
- Timing withdrawals with brackets: Coordinate distributions to stay within favorable tax brackets and avoid spikes in Medicare premiums tied to modified adjusted gross income (MAGI).
- Coordinate with a tax professional: A tax strategy should be revisited regularly to reflect changing rates, brackets, and health/long-term care costs.
Experts stress that there is no one-size-fits-all solution. The most worried about taxes will benefit from a tailored plan that accounts for investment returns, Social Security timing, required minimum distributions, and potential changes to state and local tax rules, all of which can alter net retirement income significantly.
What’s next for retirement tax planning?
With tax day still on the horizon and the first quarter of 2026 in the books, the climate remains unsettled as markets respond to inflation data and policy cues. The Allianz study suggests a lasting shift: retirement planning will increasingly center on tax efficiency as a core objective, not a niche consideration.
For Gen X, often labeled the sandwich generation, the combination of rising tax anxiety and a longer retirement horizon intensifies the need for proactive planning. As this cohort moves deeper into peak saving years, financial professionals expect more clients to demand tax-centric projections alongside traditional risk and portfolio analyses. If the current momentum holds, the market for tax-aware retirement advice and related loan strategies could become a defining feature of 2026 and beyond.
Bottom line
The most worried about taxes narrative is no longer a curiosity; it is a driving force behind how people save, spend, and borrow as they approach retirement. The Allianz findings show Gen X is at the forefront of this concern, with broad implications for advisors, lenders, and retirees alike as they navigate the evolving tax landscape in a year marked by volatility and persistent inflation.
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