3 New Tax Changes Every Retiree Should Watch in 2025
The new tax law is getting a lot of attention, especially around talk of ‘tax-free Social Security.’ But the details aren’t quite that simple. If you’re retired—or getting close—here are three changes worth knowing about.
By: Joe Catanzarite, CFP
The new tax law is getting a lot of attention, especially around talk of ‘tax-free Social Security.’ But the details aren’t quite that simple. If you’re retired—or getting close—here are three changes worth knowing about.
Three Key Changes Retirees Should Know
1. The Social Security “Tax-Free” Confusion
The new law adds a special senior deduction—$6,000 for singles, $12,000 for couples—aimed at reducing or even eliminating taxes on Social Security benefits for many retirees.
But for wealthier individuals the rules don’t change. This only applies if your income is under certain limits ($75,000 for singles, $150,000 for couples). Retirees with higher income may not see any change at all. For many affluent retirees, Social Security will still be taxable—so it’s important not to assume otherwise.
2. A Bigger SALT Deduction (For Now)
The state and local tax (SALT) deduction cap rises from $10,000 to $40,000. That’s significant relief for retirees in higher-tax states who itemize deductions.
But it’s only temporary—expiring after 2029—and phases out at very high incomes. Think of it as a window of opportunity, not a permanent solution.
3. Lower Tax Rates That Stick Around
The tax brackets put in place back in 2017 were set to expire in 2026. The new law makes those lower rates permanent. For retirees, that means a more predictable tax environment in the years ahead—something you can count on when planning income or legacy decisions.
The Bottom Line
Missing these shifts—or misunderstanding the fine print—could mean paying thousands more in taxes than necessary.
The new law creates both confusion and opportunity. For some retirees, it will bring real relief. For others, little will change. But across the board, it reshapes the rules in ways worth reviewing now.
You’ve worked decades to build your wealth. Don’t let headlines or half-truths dictate your future. With the right clarity, you can approach retirement taxes with confidence, not guesswork.
