4 Tax Changes Hitting Retirees in 2027

1. Continued Access to Deductions: One of the more notable tax changes for retirees is actually the continued availability of a deduction introduced in 2025. Retirees aged 65 and older can claim an additional $6,000 deduction per year, and the provision is currently scheduled to stay in place through 2028. You can claim this deduction whether your deductions are standard or itemized. Remember there is a limitation to keep in mind. The deduction starts phasing out at $75,000 of modified adjusted gross income for single filers, and at $150,000 for married couples filing together. While this won’t affect everyone, higher-income retirees should keep the phase-out in mind when estimating their 2027 tax bill.

2. The New Saver’s Match: The new Saver’s Match will replace the existing Saver’s Credit, providing a federal contribution of up to 50% of the first $2,000 you put into an eligible retirement account or IRA. That means you could receive up to $1,000 from the federal government each year, but only if you qualify. It applies to contributions made during the 2027 tax year. You’ll file for this in your 2028 tax return. This is income-based, so it won’t be available to everyone. For 2027, the income limit for receiving any Saver’s Match is $35,500 for single filers and $71,000 for married couples filing jointly. If you’re still working or contributing to an IRA in retirement, it could be worth checking whether you qualify before assuming you won’t benefit from the new rules.

3. Turning 401(k) Catch-up Contributions to Roths: If you’re a worker over 50 and still making 401(k) catch-up contributions, you could need to change how you make them. If your wages from that employer were above $145,000 the previous year, your catch-up contributions must now be made as Roth rather than pre-tax.

4. RMDs Affect Roths and Inherited Accounts: Required minimum distributions (RMDs) are one of the larger tax considerations for American retirees. If you need to take an RMD before making a Roth conversion, you must take the distribution first, and the RMD itself cannot be converted to a Roth. Failing to account for this could lead to a higher tax bill.

Inherited accounts have their own rule, too. If you’re a non-spouse beneficiary who inherited an account after 2019, you may need to empty it before the 10th anniversary of the original holder’s death. What Retirees Should Do Before the Tax Changes. The first step is to estimate what your 2027 income should be to figure out what your overall taxable income will be. This includes: Social Security, Private pensions, Investments, IRA withdrawals, Earned income.

Then you should get specific advice about your situation from a professional. If you’re still working and are making catch-up 401(k) contributions, check to see how the Roth changes will affect you.

Don’t wait until December to consider any Roth conversions or RMDs. Leaving these too late could mean you’ll have a higher taxable income for the year, affecting other parts of your financial life. The earlier you start, the better.

The tax changes for retirees next year might not always be obvious, so a qualified professional is the best person to talk to.










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