The new “Big Beautiful Bill” signed into law promises bigger paychecks for working Americans. Boomers who are close to retirement, the supposed benefits could help you increase your savings.

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More specifically, some of the tax breaks outlined in the bill may free up extra cash to help you save more. The reality is that some could benefit from these changes more than others.

Here’s how this bill could affect your retirement savings.

Americans aged 65 and up will be able to claim a temporary $6,000 increase in standard deduction for their federal tax return from 2025 to 2028. This deduction will apply whether or not you itemize deductions. It lowers your adjusted gross income (AGI), which can lower the amount you pay in taxes.

For those who opt for the standardized deduction though, your deduction will be for a total of $20,600 as single filers or up to $41,200 for married couples who file jointly for the 2025 tax year.

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Reporting by the Tax Foundation found that the full amount for this deduction is for those whose AGI is under $75,000. The deduction will phase out at $75,000 in income for individuals and $150,000 for joint filers. So if you’re a middle-income household approaching or in retirement, you could benefit the most.

The tax savings could help you with increases in expenses as you get older, like healthcare. Or you can put it towards savings goals. If you’re trying to put as much as you can towards your IRA, for example, you can.

Plus, if you’re retired but still paying taxes on Social Security or distributions from retirement accounts, the deduction may reduce the amount that you owe.

While much of the attention on the Big Beautiful Bill has focused on tax cuts, another major piece of the legislation could directly affect older Americans: Medicare spending cuts.

According to the Congressional Budget Office, the bill triggered a budget rule called PAYGO (Pay-as-you-go), which means that there will be cuts to certain federal programs. These cuts could mean an automatic 4% cut to Medicare funding for each year starting in 2026. That is, unless Congress passes a waiver.

Cuts across the board could affect the amount paid to doctors, hospitals and even health insurance plans. When there is less money going towards these sources, it could mean higher out-of-pocket costs for you, eating in your retirement savings.

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Basically, if insurance providers are paid less, they may end up increasing premiums to make up for the loss. You could end up paying higher co-pays and co-insurance or even paying for supplemental coverage to make sure you’re adequately covered.

If you’re planning on purchasing Medicare Advantage and Part D drug plans, the PAYGO rule could mean that these will also have higher premiums and changes in the prescriptions that are covered.

These cuts won’t happen overnight, but they could happen unless Congress acts. In the meantime, check to see what your current and potential future healthcare needs are and show how you can plan for changes in how you access and pay for care in the future.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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This article originally appeared on GOBankingRates.com: 2 Things the ‘Big Beautiful Bill’ Will Do To Boomers’ Retirement Savings