Back in 2017, the TCJA slashed income tax rates and doubled the standard deduction for individuals and families, giving many retirees a lighter tax burden. These tax cuts were temporary and were set to expire after 2025. Essentially, we presumably had about eight years of lower taxes, which opened a window for strategies like Roth conversions and harvesting capital gains at 0% in the lower brackets.

However, there was always a ticking clock. The TCJA gave us great tools for temporary tax planning, but we knew (or at least had to assume) that many of its perks would eventually vanish.

Enter the “One Big Beautiful Bill” Act, a sweeping tax-and-spending law recently passed by Congress and signed into law. This bill locks in and extends TCJA’s tax benefits, while also introducing new ones, reshaping retirement planning for years to come. So, what changed, and how can we take advantage of it?

Tax Relief for Retirees 

Sharp Drop in Social Security Taxes

One of the headline changes is that, for most retirees, the portion of Social Security benefits that ends up taxable will fall dramatically, but the underlying tax rules remain in place.[1] This is huge. Previously, if you had a moderate income, up to 85% of your benefit could be taxable. Under the new enhanced deduction, many retirees will find the taxable portion drops to 0 %—but only if their total AGI remains below $75k (single) / $150k (joint) phase-out thresholds, which disappear entirely at roughly $175k / $250k.

On top of that, the bill gives seniors another break: an extra $6,000 standard deduction for each taxpayer age 65 or older, from 2025 through 2028. [2] This is a bonus deduction on top of the regular standard deduction. If you’re married and both over 65, that’s an additional $12,000 in deductions for your household. For example, in 2025, a married couple over 65 will have a standard deduction of around $43,500, compared to roughly $30,000 under the previous law. That substantially higher deduction means many retirees could drop a tax bracket, owe fewer taxes overall, or even end up paying zero taxes.

In short, the majority of middle-income retirees—those with AGIs up to ≈ $75k (single) or $150k (joint)—will generally owe no federal tax on Social Security, while higher-income households may still see up to 85% of benefits taxed, just as before. Before the bill, roughly 64% of seniors paid zero federal income tax on their benefits; analysts project that share to climb to about 88% under the enhanced-deduction rules.

Even if you have other retirement income, such as 401(k) withdrawals, pension, or part-time work, the combination of tax-free Social Security and a beefed-up standard deduction shields a bigger portion of your income from taxes. It’s a welcome relief, especially in an era of rising costs.

Bigger Deductions, Permanent Tax Cuts, and a Four-Year Window

The “Big Beautiful Bill” doesn’t stop at helping seniors. It also made permanent (pending any changes to tax law) many of the tax cuts from 2017’s TCJA that were about to expire. That means the lower income tax brackets and higher base standard deductions we’ve had since 2018 aren’t going away. The child tax credit improvements are largely extended, and even the estate tax exemption, a critical factor for generational wealth planning, is locked in at higher levels (about $15 million per individual starting in 2026) going forward. In other words, the tax “baseline” is now set in a favorable place for the long run.[3]

That clarity is golden for planning. For at least the next four years (2025–2028), we know exactly what the tax environment will be: low rates, high deductions, and special senior tax breaks.