What the Big Beautiful Bill means for your Retirement!

Victoria Larson | Sep 15, 2025

Summary:

Big changes are on the horizon, and they could affect your retirement income, taxes, social security, and estate plan. In this video, Victoria Larson from Vitality Investments breaks down what’s in the new legislation (aka the “big beautiful bill”) and how retirees can prepare now to take advantage of the benefits or avoid potential pitfalls.

The Big Beautiful Bill extends the 2017 tax cuts for another eight years, raises standard deductions for individuals and married couples, and introduces a senior bonus deduction for those aged 65 and over, available from 2025 to 2028. The senior bonus deduction phases out at $75,000 for singles and $150,000 for married couples, with a reduction of $6 for every dollar over these thresholds. The bill also complicates retirement strategies, making it crucial to consult a tax-efficient retirement planner. Experts advise taking advantage of the extended tax cuts by converting to Roth accounts, which can grow tax-free, due to the projected $52 trillion national debt and potential future tax rate increases.

Video Transcripts:

Erin Kennedy 0:06
Victoria, good to see you. We are diving into the headlines today what the big beautiful Bill means for your retirement. As you know, Washington recently passed what President Trump is calling the big beautiful bill, which could reshape retirement planning for millions of Americans. Let's start big picture here. What do we need to know?

Victoria Larson 0:23
Okay, so there's about three major points out of that 900 page bill that are really important to our retirees. First of all, the tax cuts that were established in 2017 were set to sunset December 3120 25 right? Those tax rates have been extended, and we expect them to be around for another eight years or so. Secondly, standard deductions went up, and that included for 2025, individuals, your standard deduction went from 15,000 to 15,007, 50 for married individuals, it went from 30,000 to 31,500. what does that mean for the first $31,500 that comes into a married household, you pay no tax.

Victoria Larson 1:14
The third key point is that there's now the senior bonus deduction that some folks will qualify for

Erin Kennedy 1:24
I'm glad you brought that up, because there have been some really confusing headlines regarding those taxes on Social Security. The agency framed the new $6,000 senior tax deduction as eliminating taxes on benefits. But experts say it's not that simple. Can you explain

Victoria Larson 1:40
It certainly is not that simple. Okay, so the senior bonus deduction came with some conditions. First of all, you have to be 65 to qualify for that deduction. Secondly, it's only in law for four years. So it's available 25,26, 27 and 28. Third, there's a phase out, and the phase outs a little bit complicated. So if for a single your marginal adjusted gross income is $75,000 and for a married couple, it's $150,000 you can take advantage of that full senior bonus deduction. Individual be 6000 married couple, if you're both over 65 that's $12,000 now the phase out works like this for every dollar north of those now numbers, your senior bonus deduction is reduced by six cents up until you get to $100,000 above, which case you fully face out of that deduction. And another key factor here is, for those married individuals who file married filing separately, you are not able to take advantage of the senior bonus deduction.

Erin Kennedy 2:53
Interesting, all right, well, I think that begs the question then, does this change the strategy around saving for retirement or when to claim Social Security.

Victoria Larson 3:02
It certainly makes it more complicated. We've just been given a gift. The extension of these tax cuts is a gift, and potentially the senior bonus is a gift. How we you utilize this will depend on your particular situation. If you're sitting there with significant amount of assets in that tax deferred account, maybe it makes sense to forego that senior bonus and really optimize that 22-24% tax bracket. Other situation may be that your adjusted gross income is low enough that you can offset $12,000 more of Roth conversions with that senior bonus deduction, deduction and pay no tax, or it could make sense to delay taking Social Security. This is where working with a tax efficient retirement planner who can map out these scenarios so that you can make an informed decision is really critical.

Erin Kennedy 3:58
Yeah, you're right. I always say it has to be a conversation, not just a calculation. Yeah, good point. All right. So now let's get back to the big headline, which, as you mentioned, is the extension of the 2017, tax cuts. Why is now still a good time for a Roth conversion? And why are Roth accounts so powerful?

Victoria Larson 4:16
Well, despite this big, beautiful bill being in place in perpetuity, at the same time Congressional Budget Office is coming up and saying, Listen, we are on a train of significant debt projected at $52 trillion

Victoria Larson 4:32
So given that reality, it makes all the sense in the world to start removing some of that tax rate risk from your portfolios and really take advantage of these historically low tax rates. These are the lowest tax rates we've seen in a very long time, and we just been handed a gift of more time to take advantage of it. So I encourage folks to do that. If we take money and we do those Roth conversions, then your your assets are removed from that taxation risk and can grow tax free.

Erin Kennedy 5:09
Really good point. Yeah, they say, you know, these are permanent, but they're really permanent until they're not. As you mentioned, debt is ballooning. We can only assume tax rates are going to go higher. So Victoria, if somebody wants to take advantage of this narrow window that we are in right now for some strategic tax planning. What's the best way to get a hold of you?

Victoria Larson 5:29
I would email us at info@vitalityinvestments.org

Victoria Larson, RICP® is an independent, fiduciary financial advisor and founder of Vitality Investments. With over 20 years of experience in the financial services industry, she specializes in holistic, retirement-focused planning. Her work helps clients protect, grow, and use their assets in ways that align with their goals and values. Victoria partners closely with individuals and families to build income security, minimize taxes, and prepare for life’s financial uncertainties.

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What the Big Beautiful Bill means for your Retirement!