Your Retirement Story: What the New Tax Law Means for You
Retirement Strategist Carroll Golden
Let’s be honest—few things make our eyes roll and our stomachs churn like tax law. It’s dense, complicated, and rarely feels personal. But here’s the truth: tax changes have a direct impact on your retirement security. And while you may never want to read a 1,000-page tax bill, understanding the highlights—and working with your retirement and tax advisor to apply them—can make a meaningful difference in your saving and retirement strategy.
In my last blog, we explored how your family, culture, and generation shape the way you view retirement. Those personal influences form your retirement mindset or script. But your financial future is also shaped by something far less personal: tax law.
On July 4, 2025, President Trump signed the nearly 1,000-page One Big, Beautiful Bill Act (OBBBA) into law. While it will take time to fully understand all its provisions, some of the biggest changes affect individuals and families planning for retirement.
And while these changes bring opportunities, they also highlight one timeless truth: retirement planning is never “set it and forget it.”
What’s Changing—and Why It Matters
Here are some of the key personal tax provisions in the new law, and how they might influence your retirement plan:
Income Taxes Made “Permanent”
The Tax Cuts and Jobs Act (TCJA) changes to individual income tax brackets, rates, and the higher standard deduction are now made permanent. Personal exemptions remain eliminated.
For most Americans, this means income taxes won’t rise after 2025 as previously scheduled. But remember: in tax law, “permanent” often means “until the next change.” That’s why flexibility is key.
Enhanced Deduction for Seniors
If you or your parents are 65 or older, you can now claim an additional $6,000 deduction ($12,000 if married filing jointly) through 2028.
But here’s the catch: this deduction shrinks as your income goes up.
It starts to phase out (gradually decrease) if your income is above $75,000 for singles or $150,000 for couples filing jointly.
Once income hits $175,000 (single) or $250,000 (joint), the deduction disappears entirely.
In other words, the higher your income, the less of this deduction you’ll get. That makes planning how and when you take retirement income (from Social Security, pensions, or retirement accounts) an important strategy.
No Tax on Tips and Overtime
Through 2028, qualifying tips (Section 224) and overtime pay (Section 225) aren’t subject to federal income tax.
Again, this isn’t a blanket rule. If your income is above certain thresholds, this benefit will shrink or go away. That’s what “income phaseout” means: a benefit that tapers off as your income rises.
Estate and Gift Tax Exemption Increased
Beginning in 2026, the estate and gift tax exemption rises to $15 million per person, indexed for inflation. Unlike previous increases, this one isn’t set to expire.
This higher threshold creates powerful opportunities for family wealth transfer and legacy planning—but it also raises the stakes for conversations about wills, trusts, insurance, and gifting strategies.
Charitable Contributions Adjusted
The OBBBA makes notable changes to charitable giving rules—changes that can impact both your generosity and your tax bill.
New Reduction Floor (2026): Beginning in 2026, itemized charitable deductions will be reduced by 0.5% of your contribution base. For high-income earners, this adds an extra cost to giving. That means 2025 may be a strategic year to maximize gifts, while deductions are still fully available.
New Deduction for Non-Itemizers (2026): Also starting in 2026, those who don’t itemize can deduct up to $1,000 (individuals) or $2,000 (married filing jointly) for charitable giving. This provision, similar to the temporary pandemic-era incentive, provides a modest benefit for households that otherwise wouldn’t see a tax advantage from their generosity.
What this means: If charitable giving is important to your retirement story, the timing of your donations matters more than ever.
State and Local Taxes (SALT)
The cap on state and local tax (SALT) deductions rises to $40,000, but only temporarily—it will revert to $10,000 in 2030.
For retirees in high-tax states, this provides a planning window.
However, if your income exceeds $500,000, the benefit starts to shrink.
At $600,000 or more, the deduction disappears completely.
So, while many retirees will benefit, higher earners need to be aware that this tax break may not apply to them at all.
Why This Matters to Your Retirement Story
Tax law may seem abstract, but its effects are deeply personal. Each of these changes touches real-life retirement questions:
Will your Social Security and pension income push you above deduction thresholds?
Should you adjust your charitable giving strategy to capture tax benefits?
Do you need to revisit your estate plan and legacy documents now that exemptions are higher?
Could continuing to work part-time in retirement cost you less or more in taxes than before?
These aren’t “spreadsheet questions.” They’re life questions.
A Personal, But Never Private, Plan
Your retirement plan should reflect you—but even the most personal plan is never private. Tax laws affect your spouse, your family, and even your community when you give or pass on wealth.
Caregiving is one of the most overlooked but financially devastating risks. As I wrote in my books How Not to Pull Your Family Apart and How Not to Pull Your Life Apart: Caregiving—Overcome Challenges and Objections to Planning Conversations, these costs can not only strain relationships but also tear apart even a financially sound retirement plan. That’s why it’s critical to have conversations with family and involve your advisor in planning for short-, extended-, and long-term care.
Just as you didn’t grow up in isolation, you won’t retire in isolation. The decisions you make now ripple outward impacting not just your finances, but your family’s future.
Often called The Great Wealth Transfer—an estimated $84 trillion is estimated to pass from older Americans to Gen Xers and Millennials. Managed wisely, it could give younger generations the foundation to build lasting financial security.
But preparing for this transfer requires more than good intentions. It calls for careful planning and strategic decision-making—for both those passing on assets and those set to inherit them. Without alignment and guidance, what could be a blessing can quickly become a source of confusion, conflict, or missed opportunity.
That’s why working with a financial professional is essential. They can help you:
Understand which OBBBA provisions apply to your situation.
Adjust income withdrawals to maximize deductions.
Integrate charitable giving with a retirement income strategy.
Coordinate estate planning with new exemption levels.
Build flexibility into your plan, knowing “permanent” rules can still change.
Just as you didn’t grow up in isolation, you won’t retire in isolation. The decisions you make now ripple outward, impacting not just your finances, but your own and your family’s future.
Conclusion: Clarity Over Complexity
The OBBBA adds new layers of complexity to the tax code. But complexity isn’t the enemy—denial is. By understanding how these changes affect your story, you can make informed choices that protect your retirement and strengthen your legacy.
Your influences shaped how you see retirement. Tax laws shape how you fund it. With the right guidance, you can bring both together into a plan that’s clear, personal, and resilient.
📘 This blog builds on themes from my book, Leading in a New Retirement Era: How to Lead, Adapt, and Win in an AI-Driven World. It’s not about creating a one-size-fits-all retirement—it’s about understanding your influences, your finances, and your future so your plan is truly yours.
Disclaimer: This material does not constitute tax, legal, investment, or accounting advice and is not intended for use by a taxpayer for the purposes of avoiding any IRS penalty. Comments on taxation are based on tax law current as of the time this article was produced.
