How the Big Beautiful Bill Helps You Keep More in Retirement

If you’re 65 or older, the Big Beautiful Bill brings some of the biggest tax breaks ever for retirees.

What’s New for Seniors?

1. A $6,000 Senior Bonus Deduction
You now get an extra $6,000 deduction on your income. That means you don’t pay taxes on that part of your money. If you're married, both spouses can claim it—so that’s $12,000 total. This is on top of the regular senior deduction and standard deduction.

2. No More Taxes on Social Security (for Most)
Thanks to the new deductions, 88% of seniors won’t pay federal tax on their Social Security anymore. That’s money back in your pocket and helps cushion the shock from rising expenses.

3. Bigger Standard Deduction—Made Permanent
The standard deduction was going to phase out. Now it’s locked in and even a bit higher. In 2025, a single senior can deduct about $23,750, and a married couple can deduct $46,700.  This deduction will continue to increase annually with inflation.

4. Help for Grandparents
Want to help your grandkids with school? The law now lets you use 529 savings plan savings for more things—like tutoring or job training—and it also won’t hurt their financial aid.

How much can retirees save? In plain terms: retirees get to keep more money in their pockets. For example, the new $6,000 senior deduction.  The new $6,000 deduction is available to individuals aged 65 and over, with an income phase-out (based on Modified Adjusted Gross Income [MAGI]) starting at $150,000 for those using the married filing jointly status and $75,000 for others (with the deduction being completely phased out at $250,000 and $175,000, respectively). The deduction is available for 2025 through 2028.

Example: Mary and Joe, both 70, used to pay taxes on part of their Social Security. Now, with the new deductions, they owe nothing—saving over $1,200 a year.

Additionally, not having to pay tax on Social Security can save some middle-income seniors even more – potentially thousands of dollars annually that they no longer have to send to the IRS. These savings can help seniors pay for rising living costs, healthcare, or simply enjoy a better quality of life in retirement.