EPISODE 123 – From Saver to Spender – How to Confidently Live on Your Retirement Savings

Stepping Into Retirement: Why Spending Can Feel So Hard

In Episode 123 of the Last Paycheck Podcast, CERTIFIED FINANCIAL PLANNER® professionals Archie and Rob Hoxton tackle an issue many retirees do not expect. After decades of saving diligently, actually spending that money in retirement can feel uncomfortable, even frightening.

They describe two common personality types they see in their practice: people who are excellent savers but reluctant spenders, and people who are enthusiastic spenders but poor savers. Retirement planning is difficult for both groups, but that first group often faces a unique psychological hurdle. They have done the hard work of accumulating assets, yet feel anxiety when the paycheck stops and withdrawals begin.

For many, this hesitation is rooted in early money memories. Scarcity during childhood, parental messages about never touching principal, or memories of periods like the Great Depression or the 2008 crisis can all shape how someone feels about drawing down savings in retirement.

The Emotional Side of “Turning the Spigot Around”

Archie and Rob explain that this is not just a math problem. It is an identity and mindset shift. Throughout working years, the pattern is simple. Earn income, save a portion, never touch the nest egg. That habit is reinforced for 30 or 40 years.

When retirement arrives, the entire model flips. Income from work stops and your portfolio becomes the source of your lifestyle. Even when a financial plan shows a high probability of success, many retirees still feel uneasy. They worry about outliving their money, market volatility, or losing their sense of purpose once work is no longer central to their lives.

Rob notes that some of the people who struggle the most with this shift are also the people who delay retirement, even when they are financially ready. The fear of spending, combined with uncertainty about what comes next, keeps them working longer than they might otherwise choose.

Rethinking What Your Portfolio Is For

A major theme in the episode is reframing the role of your investments. Archie encourages listeners to ask a basic but powerful question: What were you saving for.

If the answer includes travel, time with family, meaningful volunteer work, or simply having flexibility, then at some point you must allow your money to do its job. That means seeing yourself not only as a worker, but as an investor whose capital is now doing the earning on your behalf.

They describe portfolios not as static piles of money, but as a productive “army of dollars” deployed into companies, bonds, and other assets that generate dividends, interest, and growth. Understanding how a diversified portfolio is designed to support long term withdrawals can make the idea of spending feel less like erosion and more like using a well engineered tool as intended.

The Power of a Scalable Lifestyle

One of the most practical concepts in the episode is the idea of a “scalable lifestyle.” Instead of a rigid, all or nothing retirement budget, a scalable lifestyle allows for spending that can be dialed up in good markets and pared back during more challenging periods.

Rob and Archie emphasize that being debt free is one of the most important foundations for this approach. Fixed debt payments reduce flexibility. Without them, you can temporarily reduce discretionary spending such as travel, large purchases, or luxury items if markets are struggling, without jeopardizing your basic needs.

This flexibility helps retirees feel more in control, which directly reduces anxiety about drawing from their portfolios.

Stress Testing Your Plan Against Real World Risks

Education and planning are at the heart of building confidence. Archie and Rob highlight several steps that can help a saver feel ready to spend.

1. Build and maintain a detailed financial plan

A good retirement plan does more than list account balances. It projects spending, taxes, Social Security, and investment returns under a range of scenarios. Modern planning tools can run thousands of simulations to estimate the probability that your plan will succeed, even if markets perform poorly in the early years of retirement.

2. Understand how market volatility affects withdrawals

Many retirees vividly remember 2008, along with other market shocks. The hosts explain that it is crucial to understand how different withdrawal rates behave during downturns, and how a properly diversified portfolio is designed to weather corrections and bear markets over time.

3. Clarify your non financial purpose

Part of the fear around retirement is not just about money. It is about identity. Rob jokes that he does not want to become “Rob who sits on the couch.” Thinking ahead about the roles, routines, and contributions that will give retirement meaning can make it easier to embrace the shift away from a paycheck.

From Anxiety to Confidence

The message of Episode 123 is not that fear is irrational, but that it is manageable. With a clear plan, a scalable lifestyle, and a better understanding of how your investments work, you can move from perpetual accumulation to thoughtful, confident spending in retirement.

You saved for a reason. At some point, it is not only acceptable to spend. It is the fulfillment of the plan you built.

Ready to find out if your retirement plan can support the life you want?

Download our Retirement Readiness Checklist and take the next step toward spending with confidence.
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Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

EPISODE 122 – Social Security Pay Raise? The Gotchas You Need to Know

Social Security's 2026 Pay Raise: What You Gain—and What You Might Lose

As retirees gear up for a 2.8% Social Security increase in 2026, it’s tempting to view it as a long-overdue raise. But before you celebrate, it’s crucial to understand how much of that bump might get clawed back by taxes, rising Medicare premiums, and inflation.

In Episode 122 of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton pull back the curtain on how the Social Security COLA (Cost of Living Adjustment) is actually calculated—and why it’s not as intuitive as most people think. Unlike standard year-over-year inflation comparisons, the COLA is based on third-quarter changes in a very specific inflation measure: the CPI-W (Consumer Price Index for Urban Wage Earners and Clerical Workers).

This year’s COLA is 2.8%, translating to:

  • $56 more per month for the average individual
  • $88 more per month for the average couple

But here’s the catch: Medicare premiums are also rising.

The base Medicare Part B premium is expected to jump from about $185 to $206/month. That means as much as half—or more—of your “raise” could go straight toward healthcare costs. For higher-income retirees, the IRMAA surcharge can make premiums even steeper.

Then there’s the issue of tax thresholds. Social Security benefits are subject to taxation once your income exceeds $25,000 (single) or $32,000 (married). But those thresholds haven’t budged in years. As your benefits rise, so does your chance of triggering the “tax torpedo”—where 50% to 85% of your benefit becomes taxable income.

And for high earners still in the workforce, the FICA wage cap is rising to $184,500 in 2026. That means you’ll pay more in payroll taxes—while still receiving the same capped benefit later in life.

Take Control of What You Can

Despite these complexities, there’s good news: With smart planning, you can reduce the impact of taxes, Medicare premiums, and inflation on your retirement income.

Re-evaluate your Social Security claiming strategy
Consider income shifting or Roth conversions
Review your Medicare premium brackets
Update your retirement projections using realistic inflation rates

Want help understanding how these changes affect you?

Download the Social Security + Medicare Planning Audit

Use our free worksheet to estimate your real net benefit after taxes and Medicare deductions, and plan your next steps.
Download The Audit Now
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

EPISODE 121 – The Geography of Retirement: Why Your State Matters More Than You Think

When most people picture retirement, they imagine beach towns, warmer weather, or a slower pace of life. But there’s one factor that often gets overlooked—and it could drastically change your financial future: the tax implications of where you live.

In this episode of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton walk listeners through how your choice of state impacts your finances in retirement. From Social Security taxes to property levies, they make the case for why your zip code matters just as much as your income level.

The Tax Breakdown: Not All States Are Created Equal

There are 50 states—and 50 different tax structures. Some states (like Florida and Texas) have no income tax. Others (like California and New York) can significantly reduce your take-home income through higher income, property, or sales taxes.

Rob and Archie discuss:

  • Social Security taxation: Most states don’t tax it, but a few—including West Virginia (until 2026)—still do.
  • IRA and 401(k) withdrawals: Even if your federal taxes are consistent, state tax rules vary widely.
  • Property taxes: The difference between paying $700/year (Alabama) and $9,300/year (New Jersey) can blow a hole in your retirement plan.
  • Sales taxes: Some states trade low income taxes for higher consumption taxes. Be prepared.

Don’t Forget Estate and Inheritance Taxes

Twelve states still levy estate taxes—and six have inheritance taxes. If you live in Maryland, you’re hit with both. The federal exemption may not apply at the state level, so planning ahead is crucial if you’re hoping to preserve generational wealth.

Why Geography Isn’t Just About Lifestyle

Sure, you want to love where you live. But what if moving a few miles over the state line could save you thousands per year? The Hoxton’s highlight simple geographic tax-saving strategies, like:

  • Moving from Maryland to West Virginia
  • Swapping New Jersey for Pennsylvania
  • Buying in Delaware to avoid sales tax

These moves may sound small, but they can significantly reduce retirement expenses without requiring major sacrifices in lifestyle.

Your Financial Takeaway

Retirement planning isn’t just about how much you’ve saved—it’s also about where you spend it. By considering state taxes, property values, and cost of living, you can stretch your dollars further and avoid nasty surprises later on.

Download our Retirement Relocation Readiness Audit to assess whether your move is truly saving—or costing—you.

Thinking about relocating for retirement?

Make sure you’re not trading sunshine for higher taxes. Download our free Retirement Relocation Readiness Audit to compare costs and tax impacts before you move.
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Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

EPISODE 120 – The Retirement Money You Forgot About – And How to Find It

What if you had $67,000 sitting in an old account and didn’t even know it?

In Episode 120 of The Last Paycheck Podcast, CFP® professionals Rob and Archie Hoxton sound the alarm on a shocking statistic: over 32 million 401(k) accounts are forgotten—totaling nearly $2 trillion in unclaimed retirement savings.

As more Americans change jobs—an average of 12 times over their careers—it’s increasingly easy to lose track of old retirement accounts. A new job, a move, a forgotten login, or awkward exit from a former employer can cause retirement savings to be misplaced or abandoned altogether.

Why 401(k)s Get Lost

  • You change jobs and forget about the old plan.
  • HR doesn’t communicate rollover steps clearly.
  • Your mailing address or email changes.
  • The employer switches plan custodians.
  • You mistakenly think you rolled everything over.

And because statements may have been mailed to your old address or sent to a now-defunct work email, it’s easy to miss the clues.

The High Cost of Forgetting

Leaving retirement accounts unmanaged can result in:

  • Poor investment returns (some old accounts default to low-interest cash funds).
  • Missed employer contributions due after your departure.
  • Outdated beneficiary designations—an ex-spouse or deceased parent could still be listed.
  • Higher management fees after you leave the employer.
  • Unclaimed checks mailed to the wrong address and never received.

In short, forgotten accounts can cost you significantly—both in dollars and in missed opportunity.

How to Reclaim Lost 401(k)s

Rob and Archie share several actionable steps:

  1. Make a list of all former employers. If they offered a 401(k), track it down.
  2. Search the DOL’s Retirement Savings Lost & Found
  3. Check state unclaimed property websites and com.
  4. Contact former HR departments, even if it’s awkward.
  5. Request recent account statements and update your beneficiary details.

What to Do Next

If you find an old 401(k), you have several options:

  • Roll it into your current employer’s plan for consolidation.
  • Roll it into an IRA for broader investment choices.
  • Leave it where it is, but only if you’re actively monitoring it.
  • Cash it out, though this is usually the least favorable due to taxes and penalties.

Rob and Archie emphasize: Don’t wait. Make recovering and consolidating your retirement funds part of your job transition checklist. The longer you delay, the higher the risk of forgetfulness, lost funds, or poor investment performance.

Need Help Finding Yours?

If you think you might have a forgotten retirement account—or simply want to ensure your retirement savings are properly managed—start with our Lost 401(k) Recovery Checklist and schedule a consultation today.

Download the checklist now:
Lost 401(k) Recovery Checklist

Think you’ve forgotten a 401(k)?

Don’t leave money on the table. Use our Lost 401(k) Recovery Checklist to track down every account and secure your financial future.
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Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 116 – How to Handle Bear Markets at Every Stage of Life

Weathering the Storm: How to Handle Bear Markets Based on Your Age and Stage

Market downturns are a fact of life—just like taxes, birthdays, and awkward holiday dinners. The question isn’t whether bear markets will happen (they will), but how to handle them in a way that protects your long-term financial health.

In Episode 116 of Last Paycheck, CERTIFIED FINANCIAL PLANNER® professionals Rob and Archie Hoxton walk listeners through how to think about market drops differently depending on where you are in your life journey. Here’s what they had to say.

Bear Markets in Early Career: Buy the Dip, Don’t Fear It

When you’re in your 20s or 30s, volatility can actually work in your favor. You’re buying shares at a discount during bear markets, which boosts long-term returns. But many young investors fall into the trap of viewing portfolio balances like bank accounts—when values drop, they panic and stop contributing.

Don’t make that mistake.

The Hoxtons recommend staying the course (or even increasing your contributions if possible) during down markets. Think in terms of share count, not account balance. This mindset shift can turn market dips into long-term gains.

Mid-Career: Stay the Course, Even While Catching Up

If you’re in your 40s to early 60s and still accumulating wealth, bear markets can feel riskier—especially if you’re behind on retirement savings. But the key lesson remains: keep contributing. Don’t let temporary declines derail your long-term strategy.

It may also be time to start refining your asset mix—adjusting the stock/bond ratio and increasing your emergency fund to reduce your emotional reaction to market swings.

Early Retirement: Flexibility Is Power

In the decumulation phase (the early years of retirement), bear markets are trickier. You may need to sell shares for income—but if markets are down, that means selling more shares to get the same dollar amount.

To reduce this risk, Rob and Archie recommend:

  • Holding 6–12 months of expenses in a “secure bucket” (cash, CDs, etc.)
  • Reducing spending temporarily during a downturn
  • Keeping your lifestyle scalable so you can pause discretionary expenses if needed

This flexibility can make the difference between staying on track and running into trouble.

Late Retirement: Don’t Go 100% Conservative

While it’s common to shift toward more conservative investments with age, Archie warns against becoming too conservative late in life. You may still need growth to fund longevity, healthcare costs, or legacy goals.

The right ratio of stocks, bonds, and cash depends on your personal needs—but don’t assume 100% bonds is the right choice at 85. Growth still matters.

The Bottom Line: Have a Plan

Ultimately, your success in navigating bear markets depends on having a well-thought-out financial plan. With a strategy that considers your time horizon, income needs, and psychological tendencies, you can avoid costly mistakes and turn downturns into long-term opportunities.

Ready to stress-test your investment strategy before the next bear market?

Download the Investment Alignment Worksheet to evaluate your portfolio—and see if you’re truly prepared for what’s ahead. Or schedule a free consultation to talk to a fiduciary advisor who’s on your side.
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Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 115 – Should You Downsize? Avoid These Costly Mistakes

For many retirees, downsizing sounds like the perfect plan. A smaller space. Less maintenance. More cash in your pocket. But without proper planning, it can also lead to financial pitfalls that eat away at your retirement security.

In Episode 115 of the Last Paycheck Podcast, Certified Financial Planners® Archie and Rob Hoxton break down the emotional and financial implications of downsizing. They share client stories, real-life scenarios, and their best advice for approaching this major life transition with eyes wide open.

Why Downsizing Is a Retirement Gamechanger

Many retirees are sitting on significant home equity, especially after years of rising real estate prices. Downsizing is often a key strategy to unlock that equity for retirement income or legacy goals. Whether you’re thinking about moving closer to grandkids, entering a retirement community, or just shedding square footage, the why behind your move matters.

But don’t let emotions take over. Acting too quickly—especially in today’s competitive housing market—can create major tax and liquidity issues.

Don’t Make These Mistakes

Here’s what Archie and Rob warn against:
1. Signing a Contract Before Talking to Your Advisor
It’s tempting to move fast when your dream home hits the market. But buying before you’ve sold your current home can leave you scrambling for funds—and potentially incurring massive capital gains if you sell investments in a taxable account.
2. Ignoring Better Short-Term Financing Options
If you’re between selling one home and buying another, consider a:
  • Home Equity Line of Credit (HELOC)
  • Securities-backed line of credit (from a brokerage account) These options can help you access liquidity without selling investments or triggering taxes.
3. Falling for Shady Lending Practices
Some lenders may suggest moving IRA assets to their firm to “qualify” for better loan terms. This is often unethical and may even be illegal. IRAs cannot be used as loan collateral, and no lender should require asset transfers just to issue a loan.
4. Overlooking Accessibility and Future Needs
Will your next home still serve you well at age 80 or 90? Ask yourself:
  • Can I live on one level?
  • Is the home accessible?
  • Are care services or retirement communities nearby?
  • Will I have to move again in a decade?
Rob and Archie compare the best retirement communities to going back to college—built-in meals, friends, and activities—with fewer keg stands.

The Bottom Line

Downsizing can absolutely help fund your retirement and simplify your life—but only when approached with the right strategy and support. Before making your move:

  • Map out your funding plan
  • Talk to your advisor
  • Understand the tax impacts
  • Look at the whole picture—your finances, your lifestyle, your future care

Need help building your downsizing game plan?

Download the Downsizing Decision Audit Worksheet to evaluate your readiness—and schedule a no-pressure consultation with our team.
Download The Checklist
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 113 – Politics and Your Portfolio: How to Invest Without Losing Your Head

It’s no secret: political seasons can trigger intense emotions. But should those emotions guide your investment decisions?

In Episode 113 of the Last Paycheck podcast, Rob and Archie Hoxton explore how politics—left, right, or center—can quietly sabotage even the most thoughtful investors. From fear-induced selloffs to overconfidence when a preferred party is in power, political cycles tend to amplify emotional investing.

And that’s a problem.

Why Political Emotions Don’t Belong in Your Portfolio

Many investors believe that the markets will perform better—or worse—based solely on which party holds power. But the truth is more complex. Historically, markets have performed well under both Republican and Democratic leadership. Why? Because markets respond to long-term economic and business trends—not daily political drama.

As Archie puts it: “The market doesn’t care who’s president—it cares about earnings, interest rates, and business conditions.”

That means your personal reaction to politics could cause you to time the market poorly. And that rarely ends well.

The Cost of Emotional Investing

In the episode, Rob shares a client story about someone so politically stressed they stopped checking their account. When they finally came in for a review—expecting losses—they were shocked to learn their portfolio had actually grown significantly.

This isn’t uncommon. Political turmoil may cause short-term volatility, but long-term market gains often resume once emotions cool. Unfortunately, investors who panic miss the rebound—and lock in losses.

What to Do Instead

A better approach? Create a disciplined plan that can weather political storms:

  • Diversify broadly: U.S. and international markets, various sectors, risk-balanced portfolios.
  • Rebalance regularly: Keep your strategy aligned even as markets shift.
  • Keep investing: Especially if you’re still working. Long-term growth requires long-term participation.
  • Stress test your plan: Make sure you’re still on track even if markets dip.

Most importantly: avoid investing based on the news cycle. Markets care more about stability and policy than politics. And they hate emotional investors.

The Real Secret: A Financial Plan

Markets will always swing. Political drama will always exist. But a thoughtful, stress-tested financial plan can give you the clarity to ignore the noise—and keep moving forward.

As Rob says, “Having a plan means you don’t have to wonder whether you’re okay when the market drops. You’ll already know.”

Worried politics might derail your financial strategy?

Download our free Emotion-Proofing Your Investment Strategy worksheet to audit your current habits—and start planning with confidence. Or schedule a call with our team at Hoxton Planning & Management.
Download The Worksheet
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 112 – Should You Trust Financial Rules of Thumb? Here’s What to Know

When it comes to managing your money, simple advice is appealing. Save 10%. Pay off all your debt. Take Social Security at 70. But are these “rules of thumb” really helping—or could they be steering you off course?

In Episode 112 of Last Paycheck, Archie and Rob Hoxton dive into the most common financial shortcuts and challenge their usefulness in real-world scenarios.

The Truth Behind 6 Common Rules of Thumb

Let’s walk through the popular rules discussed—and why they may or may not work for your situation.

1. Save 10% of Your Income

This is often the first bit of advice people hear when starting a new job. And for someone just getting started, it’s not bad. But for someone playing catch-up or approaching retirement? 10% likely won’t cut it. You may need 15% or more, especially if you didn’t start saving in your 20s.

Bottom line: A good starting point, but not a long-term strategy.

2. You’ll Need 80% of Your Income in Retirement

Rob and Archie caution that this rule may be outdated. Many retirees end up needing closer to 100%—especially in the early, active years of retirement filled with travel and new experiences. Later, healthcare costs often rise, adding more pressure to retirement budgets.

Bottom line: Don’t underestimate your lifestyle or medical expenses.

3. The 4% Withdrawal Rule

The 4% rule assumes you can withdraw 4% of your portfolio annually (adjusted for inflation) for 30 years without running out of money. But markets fluctuate. Emergencies happen. Needs change.

Bottom line: It’s a guide—not a guarantee. Your plan should adapt to your life.

4. Be Debt-Free Before Retirement

This one feels good—but may not always be the smartest financial move. If you have a 2% mortgage and your investments earn more, paying off that mortgage early could cost you in long-term growth. The key is balance.

Bottom line: Don’t sacrifice future wealth for short-term comfort.

5. Keep 3–6 Months in an Emergency Fund

Archie and Rob agree this is situational. A business owner with unpredictable income may need more than six months saved. A risk-tolerant investor with ample liquidity elsewhere might be fine with less.

Bottom line: Customize your emergency fund to your lifestyle and risks.

6. Delay Social Security Until 70

While waiting can increase your monthly benefit, it’s not always the best move. Health concerns, family longevity, and income needs all play a role. For some, claiming early might be a better fit—even if it’s not “optimal” on paper.

Bottom line: When to claim Social Security should be a personal decision, not a rule.

The Takeaway: Rules Are Just a Starting Point

Financial rules of thumb exist for a reason—they offer simplicity and can be helpful in the absence of a plan. But life isn’t one-size-fits-all, and neither is your money.

If you’ve been relying on quick shortcuts or conventional wisdom, now is the time to upgrade from “general advice” to a personalized plan that reflects your unique life, goals, and risks.

Want to stress-test your assumptions?

Download our Are You Relying on the Right Rules? Self-Audit Tool or schedule a call with Hoxton Planning & Management to start building a custom strategy that actually works for you.
Download The Audit Tool
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 111 – Tax Law Changes for 2025 – What Retirees and Charitable Givers Need to Know

If you’re nearing retirement, living on a fixed income, or focused on charitable giving, the 2025 tax law changes may affect you more than you realize. In Episode 111 of the Last Paycheck podcast, Archie Hoxton and advisor Emily Leslie explain what you need to know—and what to do now to prepare.

1. Overtime Deduction: A Win for Middle-Income Earners

If you’re working overtime to boost savings or pay off debt, there’s good news: from 2025 to 2028, up to $25,000 of overtime income will qualify for an above-the-line deduction. This benefit begins to phase out at $300,000 of household income (MFJ).

Action Step: If you expect to earn overtime in the coming years, adjust your tax planning to take advantage of this short-term window

2. The Senior Deduction: A Modest but Meaningful Break

While headlines claimed “No More Taxes on Social Security,” the reality is more nuanced. Instead of eliminating Social Security taxes, the new law introduces a $6,000 deduction for Americans age 65+ with income under $150,000 (MFJ). It’s available from 2025 to 2028 and doesn’t apply if you’ve already started benefits before age 65.

Who Benefits Most?

  • Retirees aged 65+ with modest income
  • Those delaying Social Security to full retirement age or beyond

3. Estate Tax Made (More) Predictable

For high-net-worth individuals and business owners, the estate tax threshold has been solidified. Now, individuals can pass on up to $15 million—and couples up to $30 million—without triggering estate tax liability. This change removes the previous uncertainty around sunset provisions.

If your estate is below that amount: No changes needed.
If it exceeds the threshold: Consider trusts, gifting strategies, or business succession plans.

4. SALT Deduction Expansion: Relief for High-Tax States

Taxpayers in states like New York, New Jersey, or California may benefit from the raised state and local tax (SALT) deduction cap—now $40,000 instead of $10,000. This provision begins phasing out at $500K income and reverts in 5 years.

Be cautious: Roth conversions or large IRA withdrawals could inadvertently push you over the $500K income limit, disqualifying you from the higher deduction.

5. Charitable Giving: More Options, More Rules

For donors, the new rules include:

  • Above-the-line deduction: Up to $2,000 for charitable gifts without itemizing
  • 0.5% AGI floor: You must give at least this amount before deductions kick in
  • $1,700 SGO credit: Donations to Scholarship Granting Organizations (SGOs) offer a dollar-for-dollar reduction in your tax bill

Pro Tip: Combining these strategies may reduce your taxable income while supporting causes you care about.

Final Thought

Tax laws are always changing—but the next few years offer unique planning opportunities. Whether you’re still working, recently retired, or managing a large estate, it’s important to understand how these changes affect your financial picture.

Want a quick way to review where you stand?

Download our free 2025 Tax Change Readiness Checklist to uncover what benefits you qualify for—and what steps you might want to take next. Schedule a free consultation to build a strategy that takes full advantage of the new law.
Download The Checklist
Certified Financial Planner Board of Standards Center for Financial Planning, Inc. owns and licenses the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, and CFP® (with plaque design) in the United States to Certified Financial Planner Board of Standards, Inc., which authorizes individuals who successfully complete the organization’s initial and ongoing certification requirements to use the certification marks.

Episode 110 – What the “One Big Beautiful Bill” Means for Your Taxes (2025–2028)

The recently passed legislation known as the “One Big Beautiful Bill” is about to reshape the personal finance landscape—and in Episode 110 of Last Paycheck, advisors Archie Hoxton and Emily Leslie walk you through what matters most for everyday families, retirees, and business owners.

Here’s what you need to know—and how to prepare.

Making the Tax Cuts and Jobs Act Permanent

The biggest headline is the permanent extension of the 2017 Tax Cuts and Jobs Act. That means the doubled standard deduction and reduced tax brackets are here to stay. For most households, this helps avoid a major tax increase that was originally expected if the law expired.

However, the flip side is the continued loss of many itemized deductions, especially those in the miscellaneous category. If you were expecting a return to the old deduction system, that’s no longer on the table.

Boosts to the Child Tax Credit

Families will see a modest but helpful increase in the Child Tax Credit—from $2,000 to $2,200 per child, with $1,700 of that amount refundable. Households earning up to $400,000 (married filing jointly) remain eligible, but you must owe federal taxes to receive the refundable portion.

Big Win for Service Workers: Tip Income Deduction

One of the most surprising—and generous—changes is a new above-the-line deduction for tip income. Starting in 2025, eligible workers can deduct up to $25,000 of tip-based income from their taxable income. This is especially helpful for servers, bartenders, delivery drivers, and others who now earn tips through credit card transactions.

The IRS and Treasury will release additional guidance about which professions qualify, but the basic test appears to be “customary and voluntary” tipping.

Auto Loan Interest Becomes Deductible (With Conditions)

For vehicles assembled in the U.S., borrowers can deduct up to $10,000 in interest on auto loans. This deduction applies from 2025 to 2028 and begins phasing out above $200,000 in household income. Buyers will need to verify final assembly location, but for many Americans, this change will offer substantial tax savings on a necessary expense.

A New Tax-Advantaged Account for Babies: The Trump Account

A new savings vehicle—informally dubbed the “Trump Account”—will give newborns a $1,000 federal contribution if they’re born between 2025 and 2028. Parents can contribute $5,000 annually, and employers can add $2,500 per year.

But there are caveats:

  • Only U.S. stocks are allowed as investments
  • Withdrawals for education, first-time home buying, or small business use are allowed after age 18—but earnings will be taxed
  • Early withdrawals come with penalties

This account blends elements of a Roth IRA and 529 plan but comes with unique restrictions that families must consider carefully.

Final Thoughts

While the “One Big Beautiful Bill” offers tax relief and new savings tools, it also brings complexity and confusion. Many of the provisions are time-limited (2025–2028), and several will require additional IRS clarification.

If you’re a tip-based worker, expecting a child, considering a new vehicle, or simply trying to make sense of these changes—now is the time to act.

Evaluate your own risk comfort and investment goals.

Download our 2025 Tax Change Readiness Checklist to audit your situation—and schedule a free consultation to build a strategy that takes full advantage of the new law.
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