By Donald Albach
Whether you’re preparing for retirement or already living it, today’s financial environment presents new challenges and opportunities. Even with a strong nest egg, concerns like healthcare costs, rising taxes, and estate preservation continue to impact financial peace of mind.
The newly passed Big Beautiful Bill—a comprehensive reform of tax, retirement, and healthcare policies—changes the rules in ways that affect almost every retiree and pre-retiree. Whether you’ve saved $1 million or $10 million, understanding how this legislation impacts your plan is essential.
1. Will My Money Last Through Retirement?
One of the most common fears among retirees and those nearing retirement is running out of money. The Big Beautiful Bill brings significant updates to required minimum distributions (RMDs), especially for individuals with IRAs valued over $10 million. These accounts may now be subject to accelerated distribution requirements, shrinking the window for tax-deferred growth.
To address this, the bill expands Roth conversion opportunities, allowing pre-tax IRA assets to be shifted into Roth IRAs, where they can grow tax-free.
But proceed with caution: Roth conversions can be a double-edged sword.
Converting large sums in one year can push you into a higher tax bracket and increase Medicare premiums. Additionally, the lost opportunity cost (money used to pay taxes now rather than staying invested) can make the conversion less beneficial than it appears.
Careful modeling and a multi-year strategy are essential to determine if a Roth conversion aligns with your long-term goals.
2. Can I Afford Healthcare and Long-Term Care?
Healthcare remains one of the most unpredictable and costly components of retirement. The Big Beautiful Bill provides some relief:
- Health savings account (HSA) contribution limits have been raised, allowing those still working to save more pre-tax dollars for future medical expenses.
- New tax credits make long-term care insurance more accessible for those preparing for home care, assisted living, or nursing facilities.
However, the bill introduces new Medicare income brackets, which could mean higher premiums for retirees with sizable distributions or investment income. That makes strategic income planning more important than ever.
3. What About My Taxes and Deductions?
The bill also makes several important changes to how your income and deductions are taxed:
SALT Deduction Adjustments
- Married couples filing jointly can now deduct up to $40,000 in state and local taxes.
- Single filers can deduct up to $15,750.
- Phaseouts begin at higher income levels, so the full benefit may be reduced for top earners.
What This Means for You: If you live in a high-tax state, these higher caps may restore much of last year’s deduction benefit, though they still fall short of the pre-2018 unlimited deduction.
Bigger Standard Deduction for Age 65+
- If you’re 65 or older, you now qualify for an additional $6,000 deduction per person.
- That’s $12,000 total for a married couple where both spouses are over 65.
Tip: With these larger standard deductions, many retirees will find it more advantageous than itemizing—especially if mortgage interest and large medical bills have declined.
4. How Does This Affect My Investments and Capital Gains?
The Big Beautiful Bill also introduces adjustments to capital gains and income tax brackets for higher earners:
- Individuals and couples earning above certain thresholds may face higher long-term capital gains tax rates.
- Ordinary income brackets for high-income earners may also increase.
Planning Opportunity: You may benefit from timing investment sales or managing your income strategically to stay in lower tax brackets—especially when combining RMDs, Social Security, and capital gains.
5. What About My Legacy and Estate Plan?
The bill dramatically reshapes estate and legacy planning:
Estate Tax Exemption Slashed
- The federal estate tax exemption is being reduced from $13M to roughly $6M per person.
- This could expose many estates (previously tax-free) to federal estate tax liability.
Step-Up in Basis in Jeopardy
- Proposed changes to the step-up in cost basis could mean your heirs pay much higher capital gains taxes when selling inherited property or assets.
Time to Review Your Plan: If you haven’t updated your estate plan in the last 2–3 years, now is the time to reevaluate with these changes in mind.
6. Are There Still Benefits to Charitable Giving?
Yes—but the way you give matters more than ever.
Because the standard deduction is higher, many retirees no longer itemize. That can reduce the tax benefit of charitable donations, unless you’re using the right strategy:
- Qualified charitable distributions (QCDs): Give directly from your IRA, satisfy RMDs, and reduce taxable income.
- Donor-advised funds (DAFs): Group multiple years of giving into one high-deduction year to maximize tax benefit while spreading gifts over time.
7. What About Social Security?
While the Big Beautiful Bill doesn’t directly alter Social Security benefits, it does influence the taxability of those benefits and your Medicare premiums, both of which are tied to your income.
Up to 85% of your Social Security can be taxable, depending on how much other income you take. Proper coordination between withdrawals, RMDs, and benefits is key to optimizing your retirement income.
8. What if the Rules Change Again?
Many of the bill’s most impactful provisions (including estate exemptions, SALT caps, and income tax brackets) are set to expire or sunset in the next 5 to 7 years. Future administrations could also reverse or revise portions of the law.
What You Can Do: Build a plan that works under current law but is flexible enough to adapt to future changes. Tax law is never static; your plan shouldn’t be either.
How Millstone Financial Group Can Help You Navigate the Big Beautiful Bill
At Millstone Financial Group, we do more than manage money. We create strategies that give you confidence, clarity, and control throughout retirement and beyond. Our team of experienced advisors is here to guide you through every piece of legislation and life change with personalized support.
We provide:
- Tailored retirement income plans that align with RMDs, taxes, and lifestyle goals
- Roth conversion modeling with tax impact analysis and break-even forecasting
- Tax-efficient withdrawal strategies using asset location and coordinated distributions
- Healthcare and long-term care planning with insurance reviews and HSA strategy
- Estate and charitable giving support in collaboration with your attorney and CPA
One of our core values is “people first, numbers second.” That means your life goals, family, and future always take priority over spreadsheets and statements.
Let’s Talk About Your Retirement
The Big Beautiful Bill changes a lot, but with the right plan, it doesn’t have to change your peace of mind.
Whether you want to explore Roth conversions, review your estate plan, or build a tax-smart retirement income strategy, Millstone Financial Group is ready to help.
Schedule your personalized retirement consultation today by calling (732) 385-8544 or emailing dalbach@millstonefinancial.net.
More than just up to date, let’s make sure your plan is built to last.
Sources:
- U.S. Congress: Big Beautiful Bill Summary
- IRS.gov: 2025 Tax Brackets & Retirement Updates
- AARP & Fidelity: Healthcare and Long-Term Care Data
- Center on Budget and Policy Priorities: Tax Policy Review
- Congressional Research Service: Estate Tax & SALT Deduction Reports
Advisory services are offered through Millstone Financial Group Limited Liability Company, a Registered Investment Advisor in the State of New Jersey. Insurance products and services are offered through Millstone Financial Group Limited Liability Company.
All material discussed is for informational purposes only. Opinions expressed are solely those of Millstone Financial Group Limited Liability Company and staff. All topics covered are believed to be from reliable sources; however, Millstone Financial Group Limited Liability Company makes no representations as to its accuracy or completeness. Investing involves risk including the loss of principal.
This article shall in no way be construed as a solicitation to sell securities or investment advisory services to residents of any state other than New Jersey, or where otherwise permitted. All information and ideas should be discussed in detail with your individual adviser prior to implementation.
Millstone Financial Group Limited Liability Company dba Millstone Financial Group does not offer tax planning or legal services but may provide references to tax services or legal providers. This material is intended to provide general financial education and is not written or intended as tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Millstone Financial Group may also work with your attorney or independent tax or legal counsel. Please consult a qualified professional for assistance with these matters. You should always consult with a qualified professional before making any tax or legal decisions.
