Today, John and Nick dive into the Big Beautiful Bill and what its changes mean for retirees and pre-retirees as the year winds down. They break down updates to tax brackets, standard and senior deductions, SALT caps, and Roth conversion strategies, while sharing tips on avoiding common pitfalls. Plus, they touch on credits and deductions like charitable giving, auto loans, and solar panels to help listeners make the most of these changes. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents. Speaker 1: This week on Retirement Planning Redefined, still a lot of questions out there about the Big Beautiful Bill and what happened earlier this year and some of those changes. So, we thought we would talk about that and touch on that as the year is winding down here on the podcast. So, stick around. Let's get into it. Hey, everybody. Welcome into Retirement Planning Redefined with John and Nick from PFG Private Wealth. Find them online at pfgprivatewealth.com. Guys, I know it's been around for a couple of months now, half a year or whatever, but still a lot of questions and things going on with the Big Beautiful Bill changes, especially as it affects retirees and pre-retirees. So, we thought we would dive back in and have a conversation on some of this and just maybe touch on some of the things you guys are still hearing a few months later and see if we can break this down a little bit for folks and help them out. John, how are you doing this week? John: Hey, I'm doing all right. Just getting ready for Thanksgiving here and just looking for some downtime right now. Speaker 1: Yeah, it's right here upon us. Nick, you're double whammy. You got Thanksgiving and then you got a wedding right after that. So, congratulations and happy holidays. Nick: Thanks. Yeah, it's going to be a busy end of the year. Speaker 1: Yeah, for sure. Well, speaking of, let's get into our topic here because there's lot of stuff that's happening and changes and whatnot. So, let's just dive into some of the things and break some things down. The big piece obviously was that the tax brackets that we were under the TCJA since 2017 got extended. All year, we were wondering if that was going to happen as the year was winding down. This stuff was going to wrap up at the end of this year, but they extended it and they made it permanent. So, talk to me about that, whoever wants to take this. That's interesting language and confusion for some people, but what's your thoughts on the tax brackets being extended? John: Yeah, so the tax brackets from 2017 now remain in place where they were set to expire. So, they're as permanent as I guess you could be when it comes to tax brackets- Speaker 1: To Washington. John: ... to Congress. Yeah, exactly. So, obviously, Congress can make some changes at some point, but for right now, this is where we are. For retirees, important to take a look at historically where tax brackets have been and if you really pay attention where in some pretty low tax brackets if you look throughout time. So, now could be advantageous to some people to really develop some strategies to take advantage of this low tax bracket period for themselves because permanent doesn't mean too permanent as we just discussed. Depending on what happens, the next administration, things could not become permanent. Speaker 1: So I mean, one of the things Roth conversions has been really on the radar for many people for the last number of years because to your point of the historical tax lows, so now you do have some time to Roth over time for at least a couple more years anyway, until what, '28 or '29 potentially. John: Yeah, so Roth conversions is definitely something we implement for clients, and while this is going to be in place for the next few years. Maybe we get a little bit more aggressive and I think we're going to touch on it a little bit more in the podcast. We'll talk about some of the pitfalls to avoid with that because there are some new deductions that you want to remain below. Speaker 1: Yeah, yeah, for sure. Well, Nick, let's have you just jump in and tackle some of that. So, talk to me about some of the deductions, the standard stuff, some of these other pieces that they locked into place and some things we might want to know and think about. Nick: So for people that aren't familiar with the jargon when it comes to the tax or they don't prepare themselves, essentially people have two options. They can either use the standard deduction, which is what the majority of W-2 earners do especially or they can itemize. So, the reason that people would itemize historically is they would have enough expenses maybe through a business, maybe through interest from a mortgage or kids or different things that would allow them to itemize and there'd be a benefit to them from a tax perspective. But when this was originally put into place and the standard deduction was increased, it really shifted it to people being able to just, for the most part, use the standard deduction, which previously about $29,500 for joint, $14,600 for single, and the updated number is going to be $31,500 for joint and then $15,750 for single. So, it's bumped up a little bit. Years ago, it was lower, and so there would be a lot of people that would get caught between the standard and the itemized, but it is a benefit for quite a bit of people. Speaker 1: Yeah. I mean, there's some decent numbers here we're talking about. When you take the standard deductions, it's going to be hard to get there, but you could really make a big dent. We'll talk about some of the add-on deductions as well here in a second. Does the SALT cap change a lot of things for you guys in Florida? I'm not sure versus other states like New York or California, New Jersey, and I guess maybe to clarify, John, what is the SALT cap and can you break that down a little bit? John: So I'll punt this to Nick. He just actually did this with a client. So, he can give a personal story, which is probably better than me. Nick: Yeah. So, the SALT cap is really state and local tax. It is or historically has been much more relevant in states that have higher property tax and/or state income tax. So, a lot of the northeast states, really just a lot of states in general. Here in Florida, we don't necessarily run into this a ton, however, we do have quite a few clients that do the snowbird thing. Speaker 1: Yeah, sure. Nick: So they have to incorporate taxes in other states and that thing. So, the reality is that it had previously been a benefit for people that were paying a large state income and/or property taxes. They could use it to offset the tax that they paid against their federal income. I guess when the legislation was changed, I think it was like 2017, 2018, they had reduced that SALT cap to $10,000. So, that really had an impact from the perspective of especially high income earners in states that had those different taxes that were applicable. It did cause a decently effective increase in taxes for them. So, with the good old lobbying that's done, they went ahead and increased that from the $10,000 that's been in place for the last five, six years to $40,000 cap for incomes below $500,000. So, although we don't see it here, we have recently had some clients moving into homes that do have pretty significant property taxes. Although they're not paying state income tax, the level of the property taxes where they've gotten with the run-up in real estate around this area, it has become a little bit more relevant than it was previously. Speaker 1: And so that could make a difference. So, again, you want to make sure that of all these changes that are potentially there, you're talking with your financial professional and your CPAs and working together on making sure that you're being as effective as possible. So, John, you punted that one back over to Nick. I'll give you this one, the senior deduction. There was a lot of talk, obviously, a lot of campaigning on just getting rid of taxes on social security. They did their bartering and their deals and they came up with this senior citizen deduction. I mean, it's not bad for a number of years. It's like you're not paying social security taxes, but it's a little confusing for folks. So, can you break down some of the data on that? John: Yeah, so it was initially discussed as, "Hey, we're going to eliminate social security tax." This has come up a little bit with some clients asking, "Hey, did they get rid of it?" And the answer is, your social security still is taxed, but if you're above the age of 65, you do get what they call a senior citizen deduction. That's $6,000 per person, $12,000 married filing jointly, and there are some income limits to it. The single is $75,000 and the joint is $150,000. So, I would say over the last few months, we have been doing quite a bit of planning to make sure people stay below these thresholds to maximize the deduction and when we're doing our projections f
