While it makes many provisions of the 2017 Tax Cuts and Jobs Act permanent, it also introduces brand-new tax breaks and phase-outs that could dramatically affect your income, savings, and legacy plans.
Here’s what retirees and near-retirees need to know:
1. New Senior Deduction Worth $6,000
If you’re 65 or older, you may qualify for a new $6,000 “bonus” deduction from 2025 through 2028.
Income limits apply—this phases out above $75,000 for individuals and $150,000 for couples.
This deduction can help reduce taxable income without needing to itemize.
2. Estate & Gift Tax Exemption Increases
Starting in 2026, the estate and lifetime gift tax exemption increases to $15 million per person (or $30 million per couple), indexed for inflation.
This is a significant planning opportunity for retirees with substantial assets looking to transfer wealth tax-efficiently.
3. Tax-Free Overtime & Tip Deductions
Temporary deductions are available for tips and overtime income through 2028. For many part-time or semi-retired workers, this could mean lower taxes on supplemental income.
4. Charitable Giving Options Expanded
Even if you take the standard deduction, you may now be eligible to deduct charitable donations—up to $1,000 ($2,000 for joint filers) starting in 2026.
For itemizers, a new floor has been introduced based on adjusted gross income (AGI), so planning your giving matters more than ever.
5. What You Should Do Now
Understanding the full impact of the One Big Beautiful Bill Act is critical if you’re within five years of retirement—or already retired. Tax planning today may help preserve your wealth tomorrow.
Download our free whitepaper to see the full breakdown and planning tips.
