A solid tax strategy matters even more during retirement.
Did you know that unique tax strategies are available after you turn 65? If you’ve reached or are nearing this age milestone, this blog is for you! Because our firm is rooted in St. Louis, we also cover Missouri and Illinois rules that affect retirees on both sides of the river. All figures below apply to the 2026 tax year (returns filed in 2027) unless noted otherwise.
Let’s dive into six value-driven tax moves you should use when you turn 65.
For 2026, the IRS raised the base standard deduction to $16,100 for single filers, $24,150 for heads of household, and $32,200 for married couples filing jointly. The additional amount for age 65 or older is $2,050 for single and head of household filers and $1,650 per qualifying spouse for married filers.
| Filing status (age 65+) | Base deduction | Additional 65+ amount | Total standard deduction |
|---|---|---|---|
| Single | $16,100 | $2,050 | $18,150 |
| Head of household | $24,150 | $2,050 | $26,200 |
| Married filing jointly, one spouse 65+ | $32,200 | $1,650 | $33,850 |
| Married filing jointly, both 65+ | $32,200 | $3,300 | $35,500 |
Taxpayers who are both 65 or older and blind receive double the additional amount.
The One Big Beautiful Bill Act created a new deduction of up to $6,000 for each taxpayer aged 65 or older, or $12,000 for a married couple when both spouses qualify. Key details:
Retirement tax planning tip: Inside the phaseout range, every extra $1,000 of income removes $60 of deduction per qualifying person. That quietly raises your marginal tax rate on things like IRA withdrawals, Roth conversions, and capital gains. Timing income across years can help you keep more of this deduction while it lasts.
You can only take the standard deduction or itemize, not both. The right choice depends on your situation, so it pays to run the numbers with a tax-focused financial planner each year.
The years between retirement and your required minimum distribution (RMD) age are often your lowest-tax years, which makes them a prime window for Roth conversions. Converting part of a traditional IRA to a Roth IRA each year can shrink future RMDs and reduce the tax your heirs inherit.
Here is why this window matters. Once paychecks stop, many retirees drop into a lower bracket. Once RMDs begin, often at age 73 or 75, required withdrawals stack on top of Social Security and can push income back up for the rest of retirement. Roth IRAs have no RMDs for the original owner, and qualified withdrawals are tax-free.
Where you live changes the math. Illinois lets residents subtract IRA amounts converted to a Roth IRA when figuring state income tax, according to Illinois Department of Revenue Publication 120, so conversions are generally free of Illinois tax. Missouri does not have a similar subtraction for Roth IRA conversions, so conversion income is generally taxed at Missouri’s ordinary income rates.
If Roth conversion timing concerns you, work with your financial advisor to set a conversion and withdrawal schedule that fits your income goals.
Did you know that you can deduct medical expenses?
If you itemize your deductions, remember to deduct any medical expenses you paid out of pocket that are more than 7.5% of your adjusted gross income (AGI).
According to IRS Publication 502, qualifying expenses can include:
The amount of qualified long-term care insurance premiums you can include as a medical expense is subject to an annual limit based on your age.
This LTC Insurance Tax Deduction chart shows the maximum deduction amounts over the last couple of years.
Full retirement age (FRA) is 67 for anyone born in 1960 or later. If you wait past full retirement age, delayed retirement credits increase your benefit by 2/3 of 1% per month, or 8% per year, until age 70. There is no benefit to waiting past 70.
If you claim before full retirement age and keep working, the earnings test applies. For 2026, Social Security withholds $1 for every $2 you earn above $24,480. In the year you reach full retirement age, it withholds $1 for every $3 above $65,160. Benefits also received a 2.8% cost-of-living adjustment for 2026.
In the year you reach full retirement age, only earnings before your full retirement age month count toward the limit. Starting with that month, earnings no longer reduce your benefits. Social Security also recalculates your monthly benefit to give credit for months when benefits were reduced or withheld because of excess earnings.
A note on your online estimate: The benefit estimates in your my Social Security account generally assume you keep earning about what you earned recently until you start benefits. If you stop working years before claiming, your actual benefit may be lower than the estimate shows. Our Social Security benefits by age calculator can help you compare scenarios.
If you file your federal tax return as an individual, you may have to pay federal income tax on your Social Security benefits if:
For married couples filing jointly, the corresponding thresholds are $32,000 and $44,000.
Your income doesn’t just set your tax bill after 65. It also sets your Medicare premiums and, if you retire before Medicare, what you pay for marketplace coverage. Coordinating which accounts you draw from each year is one of the most effective ways to control both.
The standard Medicare Part B premium for 2026 is $202.90 per month, up from $185 in 2025. Higher-income beneficiaries also pay an Income-Related Monthly Adjustment Amount (IRMAA) on Part B and Part D. IRMAA for 2026 is based on your 2024 MAGI.
| 2024 MAGI, individual return | 2024 MAGI, joint return | 2026 Part B premium per person (monthly) | Part D surcharge per person (monthly) |
|---|---|---|---|
| $109,000 or less | $218,000 or less | $202.90 | $0 |
| Above $109,000 to $137,000 | Above $218,000 to $274,000 | $284.10 | $14.50 |
| Above $137,000 to $171,000 | Above $274,000 to $342,000 | $405.80 | $37.50 |
| Above $171,000 to $205,000 | Above $342,000 to $410,000 | $527.50 | $60.40 |
| Above $205,000 to under $500,000 | Above $410,000 to under $750,000 | $649.20 | $83.30 |
| $500,000 or more | $750,000 or more | $689.90 | $91.00 |
IRMAA works like a cliff, not a gradual phase-in. Going $1 over a threshold triggers the full surcharge for that tier, and each spouse on Medicare pays it. For a couple in the second tier, that is about $2,300 a year in extra Part B and Part D costs combined.
If your income dropped because of a life-changing event such as retirement, you can ask Social Security to use more recent income by filing Form SSA-44.
If you retire before 65, or have a younger spouse on a marketplace plan, ACA income limits matter, too. The enhanced premium tax credits expired at the end of 2025, which brought back the subsidy cliff at 400% of the federal poverty level.
For 2026 coverage, that is roughly $62,600 of income for one person and $84,600 for a couple. Above that line, the premium tax credit disappears entirely. Check HealthCare.gov for current rules, since Congress has debated restoring the enhanced credits.
Because MAGI drives your taxes, IRMAA, ACA subsidies, Social Security taxation, and the new senior deduction, the order of withdrawals matters:
If you’re 70½ or older and already give to charity, consider a qualified charitable distribution (QCD) made directly from your IRA to an eligible charity. The eligible amount is excluded from adjusted gross income and can count toward your required minimum distribution once RMDs begin, even if you take the standard deduction.
Keeping that gift out of income, rather than taking a taxable IRA withdrawal and then donating, may help manage future Medicare premiums and preserve income-based tax benefits.
Our Retirement Decision Dashboard can help you think through how all these decisions fit together.
Both Missouri and Illinois offer property tax relief for older homeowners, but almost none of it is automatic. Most programs require an application, many must be renewed every year, and eligibility rules vary by county.
| Program | Where | Age | Key Limit | How to Apply |
|---|---|---|---|---|
| Senior Property Tax Freeze | St. Louis City, St. Louis County, other opt-in MO counties | 62+ | City: market value $528,392 or less | Apply through the city or county; renewal requirements vary. |
| Property Tax Credit (circuit breaker) | Missouri statewide | 65+ | Income-based; up to $1,550 for owners starting 2026 | Missouri tax return |
| Senior Citizens Homestead Exemption | Illinois statewide | 65+ | $5,000 EAV reduction in Metro East counties | County assessor (renewal rules vary) |
| Low-Income Senior Assessment Freeze | Illinois statewide | 65+ | Household income $75,000 or less for 2026 | Annual application to county |
It is a temporary federal deduction of up to $6,000 per person age 65 or older, available for tax years 2025 through 2028. You can claim it whether you itemize or take the standard deduction. It phases out above $75,000 of MAGI for single filers and $150,000 for joint filers.
It is a temporary federal deduction of up to $6,000 per person age 65 or older, available for tax years 2025 through 2028. You can claim it whether you itemize or take the standard deduction. It phases out above $75,000 of MAGI for single filers and $150,000 for joint filers.
RMDs begin at age 73 if you were born from 1951 through 1959, and at age 75 if you were born in 1960 or later. Your first RMD can be delayed until April 1 of the following year, but that means taking two RMDs in one year.
For 2026, IRMAA applies if your 2024 MAGI was above $109,000 on an individual return or $218,000 on a joint return. Below those levels, you pay the standard Part B premium of $202.90 per month.
No. Missouri fully exempts Social Security benefits for residents 62 and older, and Illinois exempts Social Security along with most other retirement income. Your benefits may still be taxable at the federal level.
It depends on the program. The City of St. Louis requires an application each year between March 1 and June 30. St. Louis County no longer requires annual renewal for approved participants who remain eligible. Illinois requires an annual application for the Low-Income Senior Citizens Assessment Freeze. Check your local program’s requirements and deadlines.
Illinois generally lets residents subtract Roth conversion income from state taxable income. Missouri generally taxes it as ordinary income. Both states follow the federal rule that the conversion is taxable income for federal purposes.
The most beneficial tax moves after 65 work together. Your Roth conversions affect your Medicare premiums. Your IRA withdrawals affect your senior deduction and how much Social Security is taxed. Your state and county decide which property tax breaks you can claim. Looking at them one at a time can leave money on the table.
At Toberman Becker Wealth, we work closely with CPAs to deliver tax planning that works alongside your financial plan, with a deep understanding of Missouri and Illinois rules. Download our retirement planning checklist to get organized, or book a complimentary call to talk through your situation with a retirement tax planning professional.
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Mike is a knowledgeable advisor at Toberman Becker Wealth in St. Louis. As a CERTIFIED FINANCIAL PLANNER® professional, he brings a strong technical background and a client-first approach to helping families build and manage wealth at every stage of life. He prioritizes financial education, empowering clients to make informed decisions.
What sets Mike apart is his commitment to continuous growth. He is always expanding his knowledge to deliver better outcomes for the families he serves and values collaboration with colleagues to improve client experiences. At Toberman Becker Wealth, this commitment to learning and teamwork helps drive exceptional client experiences.
Outside of work, Mike enjoys anything related to golf—spending time with family on the course, competing with friends, and sharing his love for the sport at youth golf camps.