Use These 6 Money-Saving Hacks To Counter 2025 Tax Adjustments and Retirement Structures
Written by
Heather Altamirano
Edited by
Zuri Anderson
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With so many head-spinning changes happening this year, it’s hard to focus on anything else, but there could be good news for the 2025 tax season. New adjustments have been made and keeping up-to-date on the new brackets could prevent a major tax bill.
Getting familiar now with the new changes can help implement smart strategies and hopefully save you money. Here’s what to know and six money-saving hacks to counter the 2025 tax adjustments and retirement structures.
New Tax Brackets and Rates
The income thresholds have increased and Christine Stack, certified trust and fiduciary advisor (CTFA), certified financial planner (CFP®) and wealth advisor at First Interstate Wealth Management explained what taxpayers should take note of.
- Standard deduction: The standard deduction has increased to $15,000 for single filers, up $400 per the IRS and filers and $30,000 for married couples filing jointly, which is an $800 increase.
- Social Security taxable income: The threshold for Social Security taxable income has increased from $168,600 to $176,100.
- Annual gift exclusion: Increases from $18,000 to $19,000 for those who are taking advantage of gifting strategies to transfer wealth to the next generation, tax free.
- Lifetime estate exemption: Increases from $13.6 million to $13.99 million. This is a planning opportunity for high-net-worth individuals and families.
Tax Cuts and Jobs Act of 2017
When Trump was in office the first time, he enacted the Tax Cuts and Jobs Act of 2017 (TCJA), which was a big tax code overhaul for businesses and taxpayers that is set to expire this year. Now that Trump is back in the White House, he has the opportunity to extend the TCJA and it could have a major financial impact, largely helping the rich, the Center on Budget Policy and Priorities warned.
Mike Laske, wealth management advisor with Greenleaf Trust, explained it’s a situation to keep an eye on since tax codes could be changed as a result, which would directly affect taxpayers.
“With over $4 trillion in tax increases set to take effect at the end of 2025, the upcoming year could be one of the most important for tax changes since 2017,” Laske stated. “Policymakers face a tough challenge, as extending the 2017 tax cuts could be very expensive, possibly leading Congress to introduce new taxes to cover these costs. 2025 is shaping up to be a year of significant changes in tax planning.”
If different tax codes are implemented, Laske explained that changes could go into effect immediately or even retroactively, presenting both opportunities and challenges for you.
Increase Your Retirement Contribution
With Social Security becoming increasingly unreliable to solely depend on for retirement, generating other revenues of income for your nest egg is advised. Anytime you receive a raise, even a small 1 to 2% percent increase, Stack recommended socking it away in your retirement fund.
“This strategy helps you save more for retirement without feeling a significant impact on your current lifestyle, as the increase in contributions coincides with your pay raise,” she stated. “This incremental approach helps you gradually boost your savings without significantly impacting your take-home pay.”
Look into Roth Accounts
Roth accounts can be beneficial for some since the money is not taxable if the requirements are met and Laske recommends taking “advantage a Roth accounts low tax rates, as they can provide substantial tax savings if future tax rates increase. Think of it as a sale on taxes, similar to Black Friday deals, where you can save tens of thousands in the long run.”
Take Advantage of the Catch-Up Contribution
If you’re over 50 you can contribute up to $7,500 into your 401(k) plan, and if you’re between 60 and 63 you can add up to $11,250 in 2025.
According to Stack, “By maximizing these contributions, you can accelerate your savings during the crucial years leading up to retirement. This not only helps you build a larger nest egg but also potentially reduces your taxable income, providing immediate tax benefits.
“Over time, the increased contributions can lead to higher account balances and greater peace of mind in retirement.”
Figure Out If the Standard Deduction, Itemize or Alternate Is Better for You
Higher standard deductions mean less tax burden for you. Laske suggested comparing your itemized deductions to standard deductions to see which option provides the greatest relief.
“Utilizing the higher standard deduction can simplify your tax filing process and potentially lower your taxable income,” he explained. “However, you might benefit by alternating between claiming the standard deduction and itemizing deductions in different years.”
“With this strategy, it makes sense to lump as many deductions as possible into those years when itemizing,” he explained. “For example, consider making substantial charitable contributions or scheduling medical expenses in years when you plan to itemize.”
Maximize Your Health Savings Account Contributions
A way to manage your health care expenses is with a Health Savings Account (HSA). In 2025, the new limits are $4,300 for an individual and $8,550 for a family, with an additional $1,000 catch-up contribution if you’re 55 or older, according to Stack.
“HSAs offer meaningful tax advantages. Contributions are tax-deductible. Earnings grow tax-free and withdrawals for qualified medical expenses are tax-free,” she explained. “This makes an HSA a powerful tool for saving on healthcare costs now and in retirement. Any unused funds rollover from year to year which can create a great safety net for unexpected medical expenses in the future.”
Medicare and IRMAA
Another money-saving tip to boost your retirement is related to Medicare.
“If you are on Medicare or nearing eligibility, consider the income-related monthly adjustment amount (IRMAA),” Laske suggested. “IRMAA is based on your tax filing status, the current year’s adjustment amount and your modified adjusted gross income (MAGI) from two years prior.”
“In 2025, the standard base monthly premium for Part B is $185, and Part D includes your chosen drug plan’s premium plus any applicable IRMAA surcharge,” he explained. “Strategies like timing income streams, Roth conversions and spreading out taxable income can help you minimize IRMAA surcharges in the future.”
With several notable changes taking place this year, it’s important taxpayers stay informed and implement financial plans to manage tax liability and increase retirement savings.
“Whether it’s adjusting your withholding, maximizing retirement contributions or taking advantage of seemingly small adjustments, being informed helps you make strategic decisions today that can have big impacts in the future,” Stack stated.
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