Retiree Suggests Change to Benefit Taxation Calculation

To fix the problem, the writer suggests changing the tax law to permit retirees to recover their taxable contributions within 10 years. Such a change, he says, would give retirees the benefit of more of their money sooner.

[2] A few years ago a person could recover their taxable contributions in three years. Now the law requires a simplified method to be used that would take over twenty two years to recover my taxable contributions. This would require my life expectancy to be 82 years of age when in fact the average age expectancy of a male is 72.

[3] My present health is not good and I recently lost my wife. I understand that with my passing, my estate would receive some benefit from my taxable contributions for income tax purposes. A lot of good that's going to do me!

[4] Realistically, I am currently paying taxes on money that has already been taxed. I don't believe this is fair, do you?

[5] I would like to see you implement a new tax law that would allow retirees to recover their taxable contributions to their pension within their life span. Maybe three years is too short a time but over twenty two years is too long a time frame. How about a reasonable time period of ten years?

[6] Being retired on a fixed income means every penny counts. I honestly believe that the current law is unfair and a "double tax" to those people who have made taxable contributions to their pension.

Sincerely,

[8] Your comments and views will be appreciated.

Sincerely,

Case In Point:

[10] For many years I made federally taxed contributions to my retirement pension. Now that I have retired, I have to use the 1040 Simplified Method Worksheet to recover a small portion from my partially taxable pension.

[11] At the current rate of using this method it will take me over twenty one years to recover the taxable contributions I have made to this pension. IRS people have told me that I would have to live until 84 years of age to recover all the money I have paid federal tax on. With the average male life expectancy age of 72 years, this simplified method does not appear to be very fair to retirees.

[12] There was a time when partially taxable contributions were recovered within three years but the law was changed.

[13] Perhaps a new tax law needs to be written whereby retirees can recover the taxable portion of their pension within ten years.

[14] I would appreciate your looking into this matter for the benefit of all retirees faced with the same unfairness.

Sincerely,