How Taxes Change in Retirement
March 12, 2026
As we head further into 2026, several tax changes are set to take effect that could influence your retirement income, tax bill, and long‑term planning strategy. Whether you are already retired or approaching retirement, understanding these changes now can help you avoid surprises and uncover new planning opportunities.
One of the most notable updates is an increase in standard deductions, including a new “senior bonus” deduction for individuals age 65 and older. In 2026, eligible individuals may be able to deduct an additional $6,000, while married couples could deduct up to $12,000—on top of already higher standard deduction amounts1. For many retirees, this could meaningfully reduce taxable income. However, this benefit does phase out at higher income levels, making income timing more important than ever.
At the same time, tax brackets have been adjusted for inflation, which may help offset rising costs of daily life. Still, many retirees see their taxable income increase over time due to Required Minimum Distributions (RMDs), pensions, and Social Security benefits. Without careful planning, these income sources can push you into higher tax brackets—even if your lifestyle has not changed.
For those still working or nearing retirement, changes under the SECURE 2.0 Act could also affect savings strategies. Beginning in 2026, some higher‑income individuals age 50 and older will be required to make catch‑up contributions to workplace retirement plans as Roth (after‑tax) contributions instead of traditional pre‑tax contributions2. While this may increase taxes today, it can create more tax‑free income in retirement and reduce future RMD exposure.
A thoughtful strategy can help manage taxes, protect cash flow, and support long‑term financial confidence. Contact us today and schedule a meeting to discuss how your unique situation could be affected this year.