One Big Beautiful Bill Act:
5 Ways It Could Change Your Retirement Plan
Washington just handed us a new playbook. On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (OBBBA) into law — and it’s packed with changes that will affect how you save, spend, and plan for retirement.
Some of these updates are great opportunities. Some are traps you’ll want to avoid. Either way, this is the perfect moment to pause, reassess, and make sure your plan is still working for you.
Here’s what’s inside the bill and why it matters for your money:
1️⃣ Lower Tax Rates Are Here to Stay (For Now)
Remember all the talk about the 2017 tax cuts expiring in 2025? That’s off the table. Those lower brackets are now permanent — which means we’ve still got a window for:
Roth conversions at historically low rates
Bracket management (so you don’t get pushed into a higher one by surprise)
Tax-efficient withdrawals that keep more money in your pocket
Translation: we have more room to plan, and to save you taxes, but only if we use it intentionally.
2️⃣ A Big Win for High-Tax States
The SALT deduction cap (state + local taxes) jumps from $10,000 to $40,000 for 2025 if your income is under $500k. This is a huge one-year opportunity to accelerate deductions like property taxes or charitable gifts.
After 2030, it drops back down — so 2025 could be your year to stack deductions and maximize the benefit.
3️⃣ The New Senior Bonus Deduction
If you’re 65 or older, you now get an extra $6,000 deduction per person ($12,000 per couple) — on top of your standard deduction. This runs through 2028 and can help lower how much of your Social Security is taxed.
Don’t just “take the deduction” — plan for it. See if there are tax strategies you can use to qualify this year and make sure you’re set up to get it every year it’s available.
4️⃣ The Widow’s Tax Penalty
This one’s sneaky — and it catches surviving spouses off guard every year.
When one spouse passes away, the survivor’s filing status flips from Married Filing Jointly to Single (usually the very next calendar year). Suddenly, you’re in a higher bracket with less income, and more of your Social Security and investments can become taxable.
This is where Roth conversions and income-smoothing strategies are so powerful. We can lock in today’s low rates now to protect the surviving spouse later.
5️⃣ More Changes You Can’t Ignore
RMD Age Is Rising: It’s 73 now, moving to 75 by 2033. Delaying too long could mean much bigger withdrawals later, which can trigger higher taxes and Medicare surcharges.
Inherited IRA Rules: Starting in 2025, many heirs will have to take annual withdrawals within the 10-year window and then will have to empty the account completely after the 10th year. It's easy to fall into the trap of taking the minimum withdrawal for as long as possible, however, as your account grows, so do your taxes. You may be in for an unnecessarily high tax bill in year 10. Inherited Roth IRAs avoid annual RMDs but must be emptied within 10 years, which means all that money will lose it's tax-free status.
529 Plans Get a Boost: Unused education savings can roll into a Roth IRA for the child or grandchild (up to $35,000 lifetime) if the plan is 15+ years old. It’s one of the best new ways to give kids a tax-free head start.
Here’s What To Do Now
This isn’t just “good to know” information, these changes are planning opportunities with a limited window.
Review your 2025 deductions (especially SALT and charitable giving) before year-end.
If you’re 65+, work with us to map out tax moves that help you fully benefit from the Senior Bonus Deduction this year and in future years.
Build a multi-year RMD and Roth conversion strategy while rates are low.
Update your beneficiary designations so heirs don’t get hit with unnecessary taxes.
If you own a business, revisit your entity structure and take advantage of permanent QBI deductions and immediate expensing.
Your Next Step
Big legislation like this is when proactive planning matters most. Don’t wait until tax season to find out what you could have done.
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