As 2026 approaches, many retirees are wondering what the new year will bring for their lifestyle, investments, and tax picture. The passage of the One Big Beautiful Bill Act (OBBBA) in 2025 brought welcome clarity to the tax landscape, eliminating much of the uncertainty that had surrounded the scheduled expiration of the 2017 Tax Cuts and Jobs Act (TCJA).
While the threat of higher income and estate taxes has receded for now, this is still a pivotal moment to review your retirement strategy. Stability in tax law creates opportunity, but only if you actually have a plan to take advantage of it.
Adjust your plan for the OBBBA’s permanent tax rules.
The OBBBA made many of the TCJA’s key provisions permanent, including:
- Lower individual income tax brackets;
- The higher standard deduction;
- The expanded federal estate and gift tax exemption (approximately $15 million per person, or $30 million per couple beginning in 2026, indexed for inflation).
This permanence provides a window of stability for retirees, allowing for more confident long-term planning around income withdrawals, gifting, and charitable giving. Still, “permanent” in the federal government only means “until changed again.” Future legislation or shifting priorities could alter the rules. It’s wise to use this period of predictability to make sure your plan is optimized.
Reassess your withdrawal strategy.
Markets have evolved, interest rates remain higher than in recent years, and inflation has moderated but not disappeared. That means it’s time to give your withdrawal plan a fresh look. The goal is to keep your income consistent while minimizing lifetime taxes and preserving flexibility for the future.
- Confirm Required Minimum Distributions (RMDs) under the new age thresholds;
- Review which accounts (taxable, tax-deferred, and Roth) you’re drawing from first;
- Evaluate if Roth conversions still make sense under today’s steady tax rates.
Strengthen health and long-term care planning.
Healthcare costs continue to rise, and planning for longevity remains one of the most crucial aspects of a sound retirement plan. A clear, proactive approach to healthcare can protect both your well-being and your estate.
- Revisit your Medicare supplemental coverage and evaluate out-of-pocket costs;
- Review long-term care strategies and options, including whether your insurance or savings plan still aligns with current realities;
- Update advance directives and healthcare proxies so they reflect your current wishes.
Refresh your estate and legacy plan.
With the OBBBA making the higher federal estate exemption permanent, fewer families face federal estate taxes. But that doesn’t mean planning is no longer necessary. Estate planning is not just about taxation. It’s about clarity and efficiency.
- Review wills, trusts, and beneficiary designations for accuracy;
- Consider whether your trust structure still fits your family’s needs and tax goals;
- If charitable giving is part of your legacy, revisit your Qualified Charitable Distribution (QCD) or Donor-Advised Fund (DAF) strategies.
Review your investment mix and risk tolerance.
After years of volatility and interest rate changes, your portfolio may need some fine tuning. Simplified, disciplined investing can enhance confidence and reduce anxiety in uncertain markets.
- Check whether your allocation between equities, fixed income, and cash still supports your lifestyle needs;
- Explore opportunities in high-quality bonds or CDs, which are once again offering meaningful yields;
- Consider consolidating older accounts for simplicity and transparency.
Continue tax-aware charitable giving.
Even though the TCJA tax provisions are now permanent, retirees can still benefit from thoughtful giving strategies.
- QCDs remain one of the most tax-efficient ways for those age 70½ or older to give directly from an IRA;
- Donor-advised funds allow you to make a large contribution in one year for an immediate deduction while distributing to charities over time;
- Consider aligning your charitable giving with years of higher income, for example, after realizing capital gains or completing a Roth conversion.
Simplify and coordinate.
Finally, make 2026 the year you bring all the moving pieces together, by streamlining your financial life and coordinating your team.
- Consolidate old accounts where appropriate;
- Make sure your financial advisor, CPA, and attorney are aligned on your financial plan;
- Document and communicate your intentions with trusted family members.
The passing of the OBBBA has given retirees a rare period of tax stability. Use it to your advantage by reviewing your income strategy, estate plan, and charitable goals through a fresh lens. A simplified, coordinated plan helps keep your retirement years secure and purposeful. If you’d like to review how these changes may affect your financial plan, don’t hesitate to reach out. We’re here to help.
Disclaimer: The information above is for general educational purposes only and should not be considered financial, tax, or legal advice. Always consult with a qualified professional regarding your specific situation. You should consult with your CPA and/or attorney before implementing any estate planning, gifting, or tax-related strategy.