The One Big Beautiful Bill and Your Retirement.

The One Big Beautiful Bill Act, signed in July 2025, did two things retirees should care about. First, it removed the 2026 sunset, so the lower 2017 tax brackets stay in place under current law until Congress changes them, which turns the years before your required minimum distributions start into a real window for Roth conversions. Second, it set up cuts to Medicaid over the next decade, which is a nudge to treat long-term care as something you plan for yourself rather than something you hope a government program will cover. For anyone sitting on a large traditional IRA, both changes point the same way: take more control now.

Most of the coverage on this law focused on what it costs retirees. I want to walk through the flip side, the planning openings it created, in the order I'd actually think them through. The video below covers both opportunities. The steps after it update every figure to 2026 and put a concrete couple's numbers on the whole thing.

▶ Video: youtube.com/watch?v=MumZq1ryxCI, “Two Big Opportunities The One Big Beautiful Bill Just Created For Retirees”

Watch: Patrick Shope on the two planning windows the One Big Beautiful Bill opened for retirees.

Step 1: See what the law actually changed for you

Two pieces matter here. The brackets from the 2017 tax law were scheduled to jump back up after 2025. They didn't. The law removed that sunset, so under current law the 22% bracket stays 22% and the 24% stays 24% until Congress changes them. That lets you plan around today's known rates instead of guessing, keeping in mind these are current law, not locked in forever, and could be changed in the years ahead.

The second piece is smaller and temporary. For tax years 2025 through 2028, each person 65 or older gets an extra $6,000 deduction, or $12,000 for a couple where both are 65 and up. It starts phasing out above $150,000 of income for a married couple ($75,000 single) and disappears entirely above $250,000 ($175,000 single). Note the years: this one expires after 2028, so it's a short window inside the longer stretch of current-law rates.

When you finish this step, you have something you didn't have before, which is a clear picture of today's rates under current law. That's the whole foundation for everything below.

Step 2: Look at your traditional IRA as a tax bill you haven't paid yet

Here's the thing about a traditional IRA or 401(k): every dollar in there is going to be taxed eventually. You either pay it, or your heirs do. When you turn 73 (or 75 if you were born in 1960 or later), required minimum distributions start pulling money out whether you need it or not, and you pay at whatever your rate is that year.

And the inheritance side is where it stings. Under current law, most non-spouse heirs have to empty an inherited IRA within ten years, taxed at their own rates. So if you leave a large traditional IRA to a daughter in her peak earning years, she drains it in a decade, often right on top of her own high income. That's the trap the video calls out, and it's real.

When you finish this step, you have a number in mind: how much pre-tax money you're carrying, and roughly what rate it'll get taxed at if you do nothing.

Step 3: Size Roth conversions to today's brackets

Now the window opens. A Roth conversion moves money from the traditional IRA into a Roth, where it grows tax-free and comes out tax-free later. You pay tax on the conversion now, at today's known rates, to avoid an unknown rate later. Because the sunset is gone, you can fill a bracket deliberately under current law instead of racing a deadline, while keeping in mind rates could still change in future years.

Here are the 2026 married-filing-jointly brackets to size against:

Let me show you the math on a couple we'll call Glen and Art, both 66 and retired, with about $90,000 of taxable income before any conversion and roughly $700,000 in a traditional IRA they'd like to whittle down before RMDs hit at 73. On paper, the 22% bracket runs all the way to $211,400, so they could convert about $121,000 and still stay inside 22%.

But look at what a conversion that big trips on the way up. Their extra $6,000-each senior deduction starts phasing out at $150,000 of income and is gone entirely by $250,000. And Medicare's IRMAA surcharge line sits at $218,000 for a married couple, so crossing it raises their Part B and Part D premiums two years down the road. That's the shadow-tax problem, and it's why I never just tell a couple to "fill the bracket." If Glen and Art instead convert about $60,000, bringing income to $150,000, they pay roughly $13,200 in tax at 22%, keep their full $12,000 senior deduction, and stay comfortably under the IRMAA line. Smaller, repeated for a few years, beats one big swing. If IRMAA is a new term, here's what it is and how the surcharge tiers work.

The clients who handle this well aren't the ones chasing a zero tax bill. They're the ones who decided they'd rather write the checks on their own schedule than let the IRS pick the year. For the full mechanics of sizing and timing a conversion under the new law, we go deeper in how the current brackets change the conversion decision. When you finish this step, you have a conversion plan with a dollar amount per year, not just an intention.

Step 4: Build your own long-term care plan

The second opportunity is really a warning dressed as one. The bill includes meaningful Medicaid reductions over the next decade. You might think you'll never touch Medicaid, so who cares. But Medicaid currently pays more than half of all long-term care costs in this country, and when a program that big gets squeezed, the ripple hits everyone: fewer facilities take Medicaid patients, waiting lists stretch, and quality can slip.

The odds aren't small either. Roughly 70% of people turning 65 today will need some form of long-term care in their lifetime. And it's expensive. A private nursing home room now averages around $127,750 a year, with home health aides near $34 an hour. Picture needing care at 75 for two years. That's $250,000 or more out of pocket if you have no plan (Source: Genworth 2024 Cost of Care Survey; two years at the national median private nursing home rate).

There's no single right answer here. Some couples use insurance-based solutions, some self-fund from a dedicated slice of savings, and many blend the two. What fits depends on your whole picture. When you finish this step, you have a decision on the table: which pool of money, or which policy, covers a care event, so it isn't left to chance.

Where this leaves you

Put the two together and the law is really handing you information about where things are heading: more predictable taxes in the near term, and less reliable government backing for care in the long term. The move on the tax side is to consider converting deliberately while rates are known. The move on the care side is to decide now how you'd fund two years of help. Neither is urgent this week, but both reward the people who plan before the numbers force their hand.

If you want to see the actual lines these decisions run into, our 2026 numbers sheet lays out the brackets, the IRMAA thresholds, the senior deduction phaseout, and the RMD ages on one page. Start there, then match your own income against it.

The most successful retirees I work with don't wait for problems to solve themselves. They see the change coming and adapt. This bill isn't just legislation. It's a preview, and the question is what you do with it.

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