Tax anxiety is real, although few have a plan to address it

Although Americans are bracing for a higher tax burden in retirement, most are not doing proactive, year-round tax planning to mitigate their exposure, according to an Advisor Authority study powered by the Nationwide Retirement Institute.

Four out of five investors expect taxes to rise in the future, yet less than one-third (31%) of this group are proactively adjusting their financial plan accordingly, the study said. Additionally, 17% of investors said that not knowing the best tax strategies for their portfolio or understanding tax implications (14%) before retirement withdrawals are among their biggest concerns when planning for retirement.

"Our study highlights that for most investors, tax anxiety is real – however, their plan to address it is lacking,” said Kush Kotecha, president of Nationwide Annuity. “A majority of investors are telling us they're concerned about rising taxes, but only a fraction are taking steps to prepare their portfolios. That gap between worry and action is where real financial risk can build."

More than one-third (34%) of Americans surveyed said that they mostly pay attention to taxes during "tax season," and only one in four (26%) engage in ongoing, proactive tax management all year.

Benefits of year-round planning

But year-round planning delivers advantages that go beyond minimizing a single year’s tax bill, said Kotecha. For example, he said, making planning decisions throughout the year allows investors to spread income strategically, manage tax brackets over time and reduce lifetime tax exposure.

Year-round planning also gives investors flexibility to make thoughtful decisions when opportunities arise, such as identifying optimal windows for Roth conversions, Kotecha added. “Instead of scrambling in March or early April, investors gain confidence knowing decisions can be paced and intentional. For financial professionals and advisors, year-round planning also creates a clear way to demonstrate ongoing value,” he said.

Why no year-round preparation

With all the benefits that year-round preparation offers, what may be the reasons why so many Americans are not preparing proactively for rising taxes in retirement? For many investors, tax planning starts and ends with tax season, Kotecha pointed out. According to Nationwide’s survey, more than one-third (34%) of investors told us they mostly pay attention to taxes during “tax season,” and only 26% engage in ongoing, proactive tax management all year.

“Additionally,” Kotecha said,” investors who work with a financial professional told us they count on their advisor to help them plan for taxes in retirement – but some advisors are not proactively discussing tax planning strategies or tax policy changes as part of regular review meetings.” For many investors, this means tax planning only comes up when something forces the conversation – highlighting a critical opportunity for advisors to make taxes a regular part of client discussions, he said.

Helping clients prepare proactively

Advisors can play a critical role in helping clients prepare for the possibility of higher taxes in retirement, added Kotecha. While the most effective actions happen years before taxes rise through proactive, repeatable planning steps, it’s never too late to start.  “Begin by having your clients focus on tax diversification, spreading retirement assets across taxable, tax-deferred and tax-free accounts,” he said.

Kotecha added that advisors can also explain how tax diversification creates flexibility later, allowing clients to tap income strategically, depending on tax conditions. In addition, he said, advisors can counsel their clients on strategic Roth conversions. Advisors can help clients identify windows when conversions may be the most effective, such as before Social Security or required minimum distributions start.

Preparing for RMDs is also important, as they can dramatically change a retiree’s tax picture, often triggering higher brackets, Medicare surcharges or increased Social Security benefit taxation, noted Kotecha.

Finally, Kotecha said, “you can help your clients estimate future RMD amounts before they begin, stress-test how RMD income interacts with other retirement income sources and explore ways to reduce the size or impact of future RMDs over time.”

Nationwide Retirement Institute offers this guide to help investors think about planning for a tax-efficient retirement.

The Harris Poll, on behalf of Nationwide, conducted an online survey in the U. S. among 528 advisors and financial professionals and 2,012 investors ages 18+ with investable assets (IA) of $10K+, January 15-February 6, 2026. Among the investors, there were 1,041 with a financial professional, 971 without a financial professional, 300 High Net Worth (IA of $1M-$4.99M), and 504 Less Affluent ($10K to <$100K).

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