President Trump’s “big, beautiful bill” has officially become law, and it is affecting Americans in many ways. The 940-page law covers topics like immigration and healthcare, but the changes to taxes could be the most important for older adults.
Here’s why these new tax rules matter for seniors and why the next four years are a key time to plan your finances.
Temporary Tax Deductions
Older Americans who live on fixed incomes may get some help from new tax deductions in the bill.
People aged 65 and older can now claim a bonus tax deduction: $6,000 for single filers and $12,000 for married couples. This is in addition to the standard deduction.
To get the full bonus deduction:
- Single taxpayers can earn up to $75,000.
- Couples can earn up to $150,000 together.
The bonus deduction slowly decreases for higher incomes and disappears for individuals earning over $175,000 or couples earning over $250,000.
Other deductions may help too:
- People with auto loans can deduct up to $10,000 in interest if they qualify.
- The limit for deducting state and local taxes (SALT) has increased from $10,000 to $40,000.
However, some of these deductions are temporary:
- SALT deduction will go back to $10,000 in 2030.
- Auto loan interest deduction only applies to 2025–2028.
- Bonus deduction for those 65 and older expires after the 2028 tax year.
While these tax breaks are useful, they won’t last forever. Seniors who qualify should act soon.
The bill, known as the One Big Beautiful Bill Act (OBBBA), also cuts funding for some social programs, retirement benefits, and healthcare. These changes could affect seniors in the long term.
Financial advisors can help seniors protect their money and make the most of these tax perks. Advisor.com connects you with trusted advisors who must act in your best interest. You can set up a free consultation to see if an advisor is right for you.
Permanent Cuts to the Social Safety Net
The OBBBA also reduces funding for programs like SNAP (food stamps) and changes rules for Medicaid.
- SNAP funding will move to state control in October 2027. States may reduce benefits or limit who can get help. AARP’s Nancy LeaMond warned this could make it harder for people to get food assistance.
- New work requirements for Medicaid will affect over 9 million people ages 50–64.
Experts like Arthur Caplan, PhD, say these changes are “unethical, indefensible, and tragic.”
Because of these changes, seniors need to plan carefully. Saving money now can help offset future reductions in government support for food and medical needs.
Tips to Save Money
- Have an emergency fund with at least three months of expenses, or even a year’s worth if possible.
- Compare insurance rates to save money. OfficialCarInsurance.com and OfficialHomeInsurance.com can help you find cheaper auto and home insurance. You can often save hundreds of dollars per year.
Preparing for Retirement
Even if the bill doesn’t directly affect you, building your retirement fund is important. Don’t rely solely on government programs like Medicaid or Social Security.
- Max out contributions to 401(k)s and IRAs.
- Consider diversifying with inflation-resistant assets like gold. A gold IRA through Priority Gold can help you include gold in your portfolio. Priority Gold also offers free shipping and storage for up to five years and up to $10,000 in complimentary silver when you sign up.
Taking steps now can help make your retirement more secure, even with the changes from the One Big Beautiful Bill Act.
