Which of the following factors has contributed to economic challenges in retirement financing?

High federal income taxes have significantly contributed to economic challenges in retirement financing. When individuals face high taxation on their income, it can reduce the amount of disposable income they have available for saving towards retirement. This situation can lead to a decrease in the total savings individuals can accumulate over their working lives, negatively impacting their financial stability after retirement.

Moreover, high taxes can diminish the incentives for savings and investment, which are crucial components for building a robust retirement portfolio. When taxation is high, it can effectively lower the return on investment that individuals receive from various retirement accounts and portfolios, making it more challenging for them to reach their retirement goals.

In contrast, minimal inflation rates, declining costs of living, and increased savings rates generally reflect more favorable conditions for retirement financing. Low inflation and a decreasing cost of living can ease financial pressures and enhance the purchasing power of retirees. Similarly, increased savings rates would contribute positively to retirement financing, enabling individuals to accumulate more wealth over time in preparation for their retirement years.