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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years<\/strong> Trusted by<\/strong> Retirees may need to adjust their financial plans<\/a> in light of changes introduced by the recently passed Big Beautiful Bill (BBB). The new legislation brings one of the largest tax cuts in history for middle- and working-class Americans, according to the White House<\/a>, among other provisions affecting retirement accounts, charitable giving and estate planning.<\/p>\n The law\u2019s impact will vary based on your income sources and assets, but certain movies could help put you in a better financial position. Here are three money moves retirees should consider<\/a>, according to experts.<\/p>\n<\/p>\n Update Tax Withholding<\/p>\n Right now, many retirees receive federal tax-free treatment for their Social Security benefits until the end of 2028. One change is the Senior Bonus Deduction<\/a>, allowing people age 65 and older to claim an additional $6,000 tax benefit ($12,000 for couples).<\/p>\n The decrease in taxable income means many retirees won\u2019t have to pay federal taxes on Social Security benefits, Trevor Houston<\/a>, CEO at ClearPath Wealth Strategies<\/a> in Dallas-Fort Worth, wrote in an email.<\/p>\n \u201cUpdate your tax withholding,\u201d advised Houston. \u201cIf you no longer owe taxes on Social Security, stop letting the IRS take them out.\u201d<\/p>\n According to Houston, this is a great time to review your tax withholding amounts<\/a>. \u201cYour Social Security benefit payments might still have taxes coming out even though you are no longer required to pay federal taxes on them,\u201d he added.<\/p>\n If that\u2019s the case, you could be giving up money unnecessarily each month. Retirees can adjust their withholding by submitting Form W-4V<\/a> to the Social Security Administration or updating withholding elections with pension providers.<\/p>\n Consider a Roth Conversion<\/p>\n \u201cConsidering income tax rates will remain low for the time being, now may be a strategic time to consider a Roth conversion \u2014 moving money out of traditional IRAs and into Roth accounts,\u201d explained Jacqueline Reeves, director of retirement plan services at Bryn Maur Trust Advisors<\/a> in Boca Raton.\u00a0<\/p>\n The BBB made current income tax rates permanent for individuals, trusts and estates, which were previously due to expire at the end of 2025.<\/p>\n<\/p>\n \u201cThoughtfully timed Roth conversion could help with lifetime tax management, and create a simpler and valuable legacy for future generations,\u201d Reeves added. \u201cRoth IRAs<\/a> pass to heirs income-tax-free, unlike traditional IRAs, which are taxable when distributions are taken by beneficiaries.\u201d<\/p>\n This is especially helpful to retirees who wish to transfer their wealth to children and grandchildren in higher tax brackets. Also, Roth IRAs are not subject to required minimum distributions (RMDs) during the account holder\u2019s life.<\/p>\n \u201cSince the age for RMDs has been pushed back to 75, retirees in their early 70s now have extra years where they aren\u2019t forced to take taxable withdrawals,\u201d Laura Cowan, estate planning attorney, entrepreneur and author at 2-Hour Lifestyle Lawyer<\/a>, wrote in an email.<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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