Taxes will change under Trump’s ‘big, beautiful bill’ — and it’s a huge deal for US retirees. Here’s why

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President Donald Trump’s so-called “big, beautiful bill” just became law and has unleashed far-reaching impacts that both supporters and critics are scrambling to unpack.

The 940-page legislative document touches on everything from immigration to healthcare, but it’s the modifications to the tax code that could be most noteworthy if you’re over a certain age.

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Here’s why these new rules are a big deal for American seniors across the income spectrum, and why the next four years are a crucial window for you to adjust your tax plans accordingly.

Temporary tax deductions

Older Americans who rely on fixed incomes and are struggling with the cost-of-living crisis can expect some financial relief from this bill’s new tax credits and deductions.

Those aged 65 and above can now claim a bonus tax deduction of $6,000 for single filers or $12,000 for joint filers. This is in addition to the standard deduction, and additional standard deduction most older Americans can claim.

To qualify, individual taxpayers who earn up to $75,000 or couples who earn a combined income up to $150,000 can claim the full bonus deduction.

The deduction is gradually phased out at higher income levels and is fully phased out for anyone earning over $175,000 individually or $250,000 jointly. The more you make, the less of the bonus deduction applies.

Besides this bonus, many seniors could also benefit from other deductions included in the bill.

Auto loan borrowers, for instance, can deduct up to $10,000 in car loan interest payments if they meet certain eligibility criteria, and the amount of state and local tax (SALT) payments people can deduct from their federal taxes has been raised from $10,000 to $40,000.

However, several of these deductions have expiry dates. The SALT deduction is set to revert to $10,000 in 2030, while the auto loan interest deduction only applies to purchases in 2025, 2026, 2027 and 2028.

And the bonus deduction for Americans ages 65 and over? That measure expires in the 2028 tax year.

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While many of these tax relief measures might seem attractive, they’re limited and temporary. Older Americans who can qualify may have a short window to take advantage of these temporary benefits.

Meanwhile, the One Big Beautiful Bill Act (OBBBA) makes big cuts to the social safety net, retirement benefits and medical assistance that could impact many seniors in negative ways over the long term.

At almost 1,000 pages, the OBBBA’s effect on your wallet could be as hard to pin down as the bill is to page through. But a good financial advisor can help safeguard your assets and show you how to make the most of the bill’s perks.

Finding a reliable financial advisor is now easier than ever with Advisor.com. Their network consists of fiduciaries, so they’re legally obligated to act in your best interest.

To get started, enter some basic information about yourself and your financial goals, and Advisor.com will scour through its database and match you with reputable SEC/FINRA-registered advisors near you.

A good financial advisor can stick with you for the long haul, so it’s worth taking your time to choose one. Advisor.com lets you set up a free, no-obligation consultation with your match to see whether they’re the right fit.

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Permanent cuts to the social safety net

The OBBBA includes funding cuts for some programs and tighter eligibility rules for others that could diminish the social safety net for many seniors.

Federal funding for the Supplemental Nutrition Assistance Program (SNAP), also known as food stamps, is set to be slashed and offloaded to state and local governments in October 2027.

“To manage these new costs, states may be forced to restrict eligibility, limit benefits or withdraw from the program entirely, which would make it more difficult for eligible individuals to access food assistance,” AARP chief advocacy and engagement officer Nancy LeaMond wrote in a June 29 letter to Senate leaders.

And LeaMond isn’t alone in raising the alarm.

“Currently, many individuals are limited to three months of SNAP benefits every three years unless they are working for 20 hours per week or qualify for an exemption,” noted CNBC.

“The new legislation will expand those requirements to individuals ages 55 through 64, parents of minor children ages 14 and up and veterans. It is unclear when those new rules go into effect.”

Over 11 million Americans over the age of 50 relied on SNAP as of 2023.

Meanwhile, the more than 9 million Medicaid recipients between the ages of 50 and 64 will face new work requirements to qualify for it as a result of this legislation, according to an AARP Public Policy Institute analysis.

“This big, beautiful bill — in terms of its impact on health care, on how physicians and hospitals are going to navigate the next few years — I think is the biggest immoral piece of health care legislation I’ve ever seen,” Arthur L. Caplan, PhD, a professor and founding head of the division of medical ethics at NYU Grossman School of Medicine, told Healio.

“Just unethical, indefensible and tragic.”

These controversial measures could be why 53% of American adults strongly or somewhat oppose Trump’s budget, according to a YouGov/Economist survey.

Older Americans cannot afford to waste the next four years by neglecting these changes. Every dollar saved over this period could offset the long-term impacts of reduced federal support for medical and food benefits.

That’s why making your money work harder during this time is more important than ever. These changes to Medicaid mean that having an emergency fund on hand could be essential for managing unexpected medical costs. Most experts recommend having at least three months of savings in your emergency fund, but some suggest locking down at least a year's worth of cash.

Insurance costs could be one place you could scale back to help maximize your savings. Over nine-in-ten Americans who shopped around and compared auto insurance rates from multiple lenders managed to save by switching carriers, according to a survey conducted by LendingTree.

You can compare auto insurance rates from reputable lenders like Progressive, Allstate and GEICO through OfficialCarInsurance.com.

Here’s how it works: Just answer a few questions like your age, zip code, and the vehicle you’d like to insure, OfficialCarInsurance.com will compile a list of insurers offering the most affordable rates near you.

In the same amount of time it takes to watch a cat video on Youtube, you can find rates starting at just $29/month.

For those looking to switch their home insurance provider, OfficialHomeInsurance.com lets you compare rates from over 200 insurers near you to help you find the best deals available in your area. You can save an average of $482 per year when you compare rates and select the lowest possible option for you.

The best part? This process is entirely free and won’t impact your credit score. You also typically don’t have to wait for your current policy to expire before switching carriers. Just make sure to watch out for any hidden fees.

Prepare for retirement

Since the bill has already passed, seniors have a window of roughly four years to take advantage of temporary tax relief, credits and deductions to enhance their financial security independently.

Even if the One Big Beautiful Bill Act does not impact your financial situation, it’s important to build your retirement fund to protect your well-being in the future, regardless of government policies.

Having a solid plan in place can help ensure you’re not relying solely on government programs to carry you through retirement, whether Medicaid or Social Security benefits.

One way to secure your retirement is to max out contributions to tax-advantaged accounts like 401(k)s and IRAs.

But given uncertain market conditions, you may want to diversify your retirement accounts with inflation-resistant assets like gold.

One way to invest in gold that can also help you meet your retirement savings goals is to open a gold IRA with the help of Priority Gold.

Here’s how it works: Contact Priority Gold’s precious metals specialist to discuss your goals, and they will help you determine how to integrate gold into your portfolio. From there, simply make the purchase and secure the delivery of your precious metals. If you opt for Priority Gold’s premium package, you can get free insured shipping and storage for up to five years.

What’s more, when you make a qualifying purchase with Priority Gold, you can receive up to $10,000 in complimentary silver and a free 2025 precious metals guide upon signing up.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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