OBBBA & Montana Retirees: What Just Passed and What It Means for You
1. Bigger Tax Breaks for Seniors (2025–2028)
If you’re 65+, the **One Big Beautiful Bill Act** (OBBBA), signed July 4, 2025, gives you an extra $6,000 deduction ($12,000 for couples) from your taxable income—on top of existing standard and age-related deductions.
**Why it matters in MT:** With many retirees here relying on Social Security and retirement account withdrawals, this deduction could potentially zero out federal income tax for up to 88% of beneficiaries
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2. No Direct Rollback of Social Security Taxes
Despite campaign pledges, OBBBA **did not eliminate federal taxes** on Social Security benefits—mainly due to Senate rules and fiscal concerns.
**What retirees in Montana should know:**
* Only the extra deduction lowers taxable income, not the benefits themselves
* Planning needed if your benefits were already being taxed
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3. Estate & Legacy Planning Gets a Boost
Starting 2026, the **estate and gift tax exemption** jumps to $15 million individual / $30 million couples, indexed for inflation—and was made permanent.
**MT legacy angle:** With no state inheritance tax here, Montana retirees can leverage this federal increase to transfer more wealth smoothly—great for large ranch or real estate-rich high net worth families.
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4. Watch Those Required Minimum Distributions (RMDs)
OBBBA doesn’t delay the age to start RMDs—you’ll still begin around age 75—**but the Treasury plans to study** the impact of adding RMDs to Roth-style accounts
**Your move in Montana:** Discuss rollover strategies now—especially if you hold Roth 401(k)s or large balances. Future policy shifts could change the game.
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5. Healthcare Risks from Federal Cuts
OBBBA includes over $1 trillion in spending cuts—primarily in **Medicaid and ACA subsidies**
**MT impact:**
* Reduced Medicaid funding may affect low-income seniors
* ACA premium hikes could follow—especially in non-Medicare coverage plans
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6. Short-Term Window, Long-Term Focus
* The **senior deduction expires after 2028**
* SALT deduction increase and charitable changes are temporarily in place
* OBBBA’s deficit-driven ripple effects may pressure future senior benefits or taxes
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Strategic Moves for Montana Retirees
| Goal | Suggested Approach |
| **Maximize taxable income strategy** | Use the senior deduction while it lasts (2025–2028) |
| **Estate planning** | Reassess wills/trusts to leverage higher exemption |
| **Roth vs. Traditional planning** | Consult now on rollover timing |
| **Health coverage** | Review Medicaid/ACA eligibility, enroll early |
| **Medicare timing** | Evaluate claiming age vs. income stream, especially with tax shifts |
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Final Word
For retirees across Montana, OBBBA offers immediate federal tax relief and legacy advantages—but the benefits are **temporary** and come with potential policy trade-offs. As someone steeped in financial advising—and life in the Big Sky State—we’re well-placed to navigate this era of shifting benefits, deficits, and deadlines. Use the next few years to optimize income, safeguard long-term healthcare access, and lock in legacy goals.
Need a deeper dive into crafting MT-specific withdrawal strategies or estate structures under OBBBA? Call or schedule an appointment with us today.