The newly signed “Big Beautiful Bill” promises bigger paychecks for working Americans, but for Boomers nearing retirement, it delivers a mix of opportunity and caution. Two key provisions stand out: one could help you supercharge your savings, while the other might squeeze your healthcare budget.
A Tax Deduction That Lets You Save More
From 2025 through 2028, Americans aged 65 and older can claim a temporary $6,000 boost to their standard deduction. That means single filers can deduct up to $20,600, while married couples filing jointly can claim as much as $41,200. For retirees with adjusted gross incomes (AGI) of $75,000 or less—or $150,000 for joint filers—this could translate into significant tax savings.
Lowering your taxable income means more money stays in your pocket. That extra cash could go toward rising expenses, such as healthcare, or help you reach savings goals, like maxing out contributions to your IRA. Even if you’re retired but still paying taxes on Social Security or retirement distributions, this deduction could ease your tax burden.
Medicare Cuts That Could Cost You More
Hidden in the bill is a less welcome surprise. The legislation triggered PAYGO rules, which could result in a 4% annual reduction in Medicare funding starting in 2026, unless Congress intervenes. Cuts to payments for doctors, hospitals, and insurance providers could ripple down to retirees in the form of higher premiums, co-pays, and out-of-pocket expenses. Medicare Advantage and Part D prescription plans could also see price hikes and reduced coverage.
The “Big Beautiful Bill” offers a short-term tax win for Boomers, but potential Medicare cuts mean planning ahead is essential. Use the deduction to strengthen your savings now and prepare your budget for possible healthcare cost increases down the road.