What the 'One Big Beautiful Bill' Means for Your Retirement: Key Planning Moves to Make Now

New legislation just reshaped the retirement and tax landscape. Here’s what you need to know and how to act now to take advantage of it.

When a thousand-page piece of legislation becomes law, it’s easy to get overwhelmed. But for those planning retirement or already in it, this “one big beautiful bill” could offer major planning opportunities. At Seaside Wealth Management, we’ve been digging into the details and want to share the biggest takeaways for our clients.

Tax Brackets Are Staying Lower (But Not Forever)

The centerpiece of this bill is the permanence of the 2017 Tax Cuts and Jobs Act. That means the lower tax brackets (10%, 12%, 22%, 24%, 32%, 35%, and 37%) are here to stay, at least for now.

Why this matters: Lower tax brackets create a temporary window for strategic Roth conversions, switching 401(k) contributions to Roth, and managing income to stay in favorable brackets. However, “permanent” doesn’t mean forever. This could change in the next political cycle. We see this as a 5-year opportunity.

Rethink Your Roth Strategy

Now is the time to consider:

Roth Conversions: If you’re in the 10% or 12% bracket (gap years, sabbatical, early retirement), you’re in a historically low bracket. Take advantage while you can. If you are in the 22% or the 24% brackets, it still might be worth considering a conversion. Your tax bracket might be much higher in the future when Required Minimum Distributions get large.
Switching to Roth 401(k): Consider saving to a Roth 401(k) if you have one. Even if you’re in the 22% or 24% brackets, these rates are lower than historical averages and may not last.

Planning Tip: Work with Seaside and we will coordinate with your CPA to look at a multi-year Roth conversion strategy. Think long-term over 10, 15, or even 20 years and consider how RMDs will affect your future tax bracket.

The RMD Problem Just Got More Urgent

We’re seeing more clients forced to take out RMDs of $100,000, $150,000, even $250,000. These can spike your taxes, increase your Medicare premiums (IRMAA), and cause more of your Social Security to be taxed.

Avoid the tax traps by converting pre-tax dollars to Roth while brackets are low. Manage withdrawals carefully to avoid triggering penalties or reducing valuable deductions.

Social Security Isn’t Tax-Free, But Fewer Will Pay

A new senior deduction reduces taxable income for those over 65:

$6,000 extra for single filers (under $75,000 income)
$12,000 extra for joint filers (under $150,000 income)

Caution: These benefits phase out at higher income levels. If RMDs or Roth conversions push your income too high, you could lose this deduction. Single filers get phased out at $175,000 and joint filers are phased out at $250,000

This extra deduction will last through 2028 and is not permanent.

SALT Cap Increased, But Temporarily

For Californians, this is big. The state and local tax (SALT) deduction cap has increased from $10,000 to $40,000 through 2029.

Planning Tip: Higher SALT deductions may allow more families to itemize. That opens the door for charitable giving strategies to offset income.

Charitable Giving Just Got More Rewarding

The standard deduction remains high, but now charitable donors get an extra above-the-line deduction:

$1,000 for single filers
$2,000 for married couples

Auto Loan Interest Deduction Returns

If you purchase a U.S.-made vehicle, up to $10,000 of auto loan interest is now deductible through 2028. For some families, that’s a welcome offset to today’s high auto prices. Note: the vehicle must be made in the USA.

“Trump Accounts” for Newborns

Babies born in 2025 or later will be eligible for a new after-tax savings account (nicknamed “Trump Accounts”):

$1,000 starter deposit from the government
Annual contributions up to $5,000 (adjusted for inflation)
Taxable growth; use ETFs to maximize tax efficiency
Flexible use: education, down payment, wedding, and more

Estate Tax Exemption Is Locked In (for Now)

The lifetime estate tax exemption is now $15 million per person ($30 million per couple). If you’re planning to gift assets during your lifetime, now may be the time to act.

Tip: Gifts made today under the higher exemption won’t be clawed back if the law changes later.

Action Steps for Smart Planning

Explore Roth Conversions Now – Especially if you’re in or near retirement.
Update Your Distribution Strategy – Coordinate between IRAs and brokerage accounts to manage deductions.
Maximize the Senior Deduction – Stay under the income threshold if possible.
Review Your Tax Return with a Professional – Look for new deduction opportunities.
Use the Higher SALT Cap Strategically – Combine with charitable giving if you can itemize.
Plan Multi-Year, Not Just One Year at a Time – Taxes, investments, and legacy planning should all work together.

Final Thoughts

This legislation has created a rare window of planning opportunity. But most of the benefits have an expiration date. That’s why we believe this is the perfect moment to get proactive.

Whether you’re trying to reduce lifetime taxes, maximize retirement income, or leave a legacy, now is the time to align your financial, tax, and estate strategy. As always, Seaside Wealth Management is here to help you navigate the details and plan wisely for the future. If you live in Encinitas, Oceanside, San Marcos, and Carlsbad stop in for a cup of coffee and let’s chat!