Retirees may need to adjust their financial plans in light of changes introduced by the recently passed Big Beautiful Bill (BBB). The new legislation brings one of the largest tax cuts in history for middle- and working-class Americans, according to the White House, among other provisions affecting retirement accounts, charitable giving and estate planning.
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The law’s impact will vary based on your income sources and assets, but certain movies could help put you in a better financial position. Here are three money moves retirees should consider, according to experts.
Update Tax Withholding
Right now, many retirees receive federal tax-free treatment for their Social Security benefits until the end of 2028. One change is the Senior Bonus Deduction, allowing people age 65 and older to claim an additional $6,000 tax benefit ($12,000 for couples).
The decrease in taxable income means many retirees won’t have to pay federal taxes on Social Security benefits, Trevor Houston, CEO at ClearPath Wealth Strategies in Dallas-Fort Worth, wrote in an email.
“Update your tax withholding,” advised Houston. “If you no longer owe taxes on Social Security, stop letting the IRS take them out.”
According to Houston, this is a great time to review your tax withholding amounts. “Your Social Security benefit payments might still have taxes coming out even though you are no longer required to pay federal taxes on them,” he added.
If that’s the case, you could be giving up money unnecessarily each month. Retirees can adjust their withholding by submitting Form W-4V to the Social Security Administration or updating withholding elections with pension providers.
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Consider a Roth Conversion
“Considering income tax rates will remain low for the time being, now may be a strategic time to consider a Roth conversion — moving money out of traditional IRAs and into Roth accounts,” explained Jacqueline Reeves, director of retirement plan services at Bryn Maur Trust Advisors in Boca Raton.
The BBB made current income tax rates permanent for individuals, trusts and estates, which were previously due to expire at the end of 2025.
“Thoughtfully timed Roth conversion could help with lifetime tax management, and create a simpler and valuable legacy for future generations,” Reeves added. “Roth IRAs pass to heirs income-tax-free, unlike traditional IRAs, which are taxable when distributions are taken by beneficiaries.”
This is especially helpful to retirees who wish to transfer their wealth to children and grandchildren in higher tax brackets. Also, Roth IRAs are not subject to required minimum distributions (RMDs) during the account holder’s life.
“Since the age for RMDs has been pushed back to 75, retirees in their early 70s now have extra years where they aren’t forced to take taxable withdrawals,” Laura Cowan, estate planning attorney, entrepreneur and author at 2-Hour Lifestyle Lawyer, wrote in an email.
This change is the result of the SECURE 2.0 Act, but it still creates planning opportunities for retirees. The extra time can help retirees take advantage of lower-income years, especially if combined with other provisions in the BBB to reduce their overall taxable income.
“That creates a window where you can voluntarily move money from a traditional IRA into a Roth IRA,” she added. “You’ll pay tax on the converted amount now, but then it grows tax-free for life, and your heirs won’t owe income tax on it either.”
Be Strategic With Your Giving
“You can now claim charitable donations up to $2,000 as a deduction, even if you don’t itemize your taxes,” Houston wrote.
This new above-the-line deduction allows retirees to support causes they care about while also reducing their taxable income. Unlike traditional charitable deductions that require you to itemize, this provision is available to all taxpayers, even those who take the standard deduction.
“The increased estate and gift tax exemptions will likely prompt some high-net-worth retirees to revisit their charitable giving strategies, but the motivation may shift,” explained Reeves. “With a higher exemption amount, this opens the door for more strategic and values-based giving, where retirees may feel freer to give during their lifetimes rather than deferring gifts through their estates.”
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This article originally appeared on GOBankingRates.com: 3 Smart Money Moves for Retirees After Trump’s Big Beautiful Bill
