3 Retirement Tax Rules That Changed Recently — and Who Needs To Pay Attention
Written by
Lydia Kibet
Edited by
Jenna Klaverweiden
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If you’re planning for retirement in 2026, you could be in for surprises with your taxes.
Several recent federal policy changes could create new opportunities to lower your tax bill, while others could increase it if you’re not careful. Here’s what changed and who should pay close attention.
A $6,000 Senior Bonus Deduction
“Beginning in the 2025 tax year through 2028, people 65 and older can claim an extra $6,000 deduction per person on top of the standard deduction,” said Steve Sexton, CEO of Sexton Advisory Group. “For married couples, they get $12,000,”
However, the deduction phases out if modified adjusted gross income is more than $75,000 for single filers and $150,000 for couples.
“If you’re 65 or older, the new additional deduction matters to you immediately. It can reduce taxable income in retirement, especially in years when you’re managing withdrawals or doing Roth conversions,” Sexton said.
Increased RMD Age
The required minimum distribution (RMD) age recently changed to 73, giving seniors more time before they must start withdrawing from tax-deferred accounts, like a traditional IRA and 401(k), SEP IRA, and SIMPLE IRA.
Delaying withdrawals can lower your taxable income in early retirement, but Gene Bott, CPA, tax advisor at Tax Hive, warned of the consequences. “An unexpected increase can raise your taxes more than you might expect. For example, higher distributions could push you from being taxed on 50% of your Social Security benefits to being taxed on 85%,” Bott said.
Additionally, the penalty for missing an RMD has also been reduced to 25% from 50%, and “Roth 401(k)s no longer require lifetime distributions from the original owner, meaning people will now have more flexibility in how they structure income on their taxes,” Sexton said.
Super Catch-Up Contributions
Beginning in 2025, those ages 60 to 63 can make higher super catch-up contributions. Instead of the standard $7,500 for 2025, you can now contribute up to $11,250 extra. “This marks a solid real opportunity for people who are in their peak earning years and want to make up for lost time,” Sexton said.
However, high earners need to pay attention. “If your income exceeds around $150,000 (adjusted for inflation), you may not be able to make these contributions as pretax contributions, but may be restricted to Roth contributions,” Bott said. This could potentially impact your taxes down the road.
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