THE high rate of inflation is hitting everyone’s wallets, but especially those living on a fixed income, such as retirees.
However, Michigan Governor Gretchen Whitmer is developing a plan that could ease some of the financial burden that retirees are feeling.
Earlier this year, Governor Whitmer proposed a retirement tax repeal in her State of the State address, and the goal is to put money back in the pockets of seniors for help them fight against the high rate of inflation.
It is estimated that eliminating this tax would help Michigan seniors save an average of $1,000 per year, which would help them better afford essentials, such as prescriptions, rent, utilities and car payments.
Not only would seniors have more money in their wallets, but his plan would also restore deductions for private retirement income, including private sector pensions, withdrawals from Individual Retirement Accounts (IRAs), and part of retirement income. a 401(k) account that is subject to an employer match.
AARP Michigan Director Paula D. Cunningham supports the governor’s plan.
Cunningham said, “We support the Governor’s call to phase out the retirement tax. Michiganders who worked hard, played by the rules and paid their due deserve to retire with dignity. We urge state lawmakers to do the right thing by repealing this law….”
Another senior attorney, Georgia Crawford-Cambell, explained why it is necessary for the governor’s plan to pass.
She noted that “Michigan has the fastest growing population of seniors in the country, and we need more disposable income to grow and live in. [the] communities [here.]”
Economists are worried
Although the governor is getting bipartisan support and tons of backing from Michiganders for proposing to repeal the retirement tax, some economists are worried about where the state of Michigan will offset the revenue from that tax.
Right now the plan is to use surplus government revenue; however, economists believe it may not be the best decision.
But, according to Senator Tom Barrett, the state has the bandwidth to fill the revenue gap, as it is in a privileged position due to large increases in revenue, which ensures that there is no nothing to fear.
Michigan generated an additional $5.8 billion and received nearly $15 billion in federal assistance for pandemic relief and infrastructure improvements, a Bridge report shows.
The Sun spoke with Professor Laurence J. Kotlikoff about ways to maximize your Social Security benefits.
We also explain how more than 217 million Americans are at risk of having their Social Security benefits cut.
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