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Why ‘big beautiful bill’ doesn’t end taxes on Social Security benefits

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1 year ago

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Republican presidential nominee former President Donald Trump speaks at a campaign rally in Asheville, N.C., Wednesday, Aug. 14, 2024.

Matt Rourke | AP

The Social Security Administration sent what experts say is a misleading email to consumers last week, describing President Donald Trump‘s “one big beautiful bill” as “long-awaited tax relief to millions of older Americans.”

In that email and a July 3 press release, the agency said the legislation will make it so “nearly 90%” of Social Security beneficiaries no longer pay federal income taxes on benefits. It attributed that to an additional $6,000 senior deduction and another unspecified provision.

Tax experts say that is not accurate.

The legislation does not, as the agency put it, include “a provision that eliminates federal income taxes on Social Security benefits for most beneficiaries.” Moreover, while the Social Security Administration memo said the law helps protect Social Security, experts say the provisions weaken the program’s funding by reducing the tax money it receives.

“It’s simply not correct to say that there’s a provision in this bill that is going to eliminate the Social Security benefit tax for 90% of the population,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

“And it’s also just wrong to say that this is going to preserve the solvency of Social Security,” Gleckman said.

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Trump had said on the campaign trail that he planned to eliminate federal income taxes on Social Security benefits. However, the reconciliation process through which the budget and tax legislation was passed prohibits changes to Social Security.

The Social Security Administration did not return requests for comment. The White House deferred comment to the Social Security Administration.

The Council of Economic Advisers, an agency within the presidential executive office, estimates that changes in the legislation will help push the portion of seniors with exemptions and deductions exceeding Social Security income to 88%, from 64% under current law.

Those tax changes include a higher standard deduction, the existing senior deduction already in effect and the new additional senior deduction or “bonus.”

How the $6,000 senior ‘bonus’ works

The new tax package includes an additional deduction of up to $6,000 for seniors ages 65 and over.

While the additional senior deduction has been called a “bonus” in the legislative text, it is technically a deduction, which reduces the amount of income that is subject to taxes.

Notably, that does not necessarily mean seniors will see a $6,000 “bonus” check in the mail or in their refunds at tax time.

“This is not like what happened during Covid, when the government was writing checks to people,” Gleckman said.

Per the legislation, the deduction will be in place for tax years 2025 through 2028. It will be available to eligible taxpayers regardless of whether they take the standard deduction or itemize their returns.

But eligibility depends on income. Taxpayers with up to $75,000 in modified adjusted gross income — or up to $150,000 if married and filing jointly — may receive the full deduction. For incomes above those thresholds, the deduction gradually phases out.

Middle-income seniors stand to benefit the most from the change, according to tax experts.

How the bonus affects tax on Social Security benefits

A person holds a sign reading ‘Save Our Social Security’ in support of fair taxation near the U.S. Capitol in Washington, D.C. on April 10, 2025. Tax justice advocates attended a rally to speak out against President Trump’s tax cuts for the wealthy, and to urge members of Congress to intervene.

Bryan Dozier | Afp | Getty Images

Social Security benefits are taxed based on combined income, or the sum of adjusted gross income, nontaxable interest and half of Social Security benefits.

Individuals with between $25,000 and $34,000 in combined income may have up to 50% of their Social Security benefits taxed. If their combined income is more than $34,000, up to 85% of their benefits may be taxed.

For married couples with combined income between $32,000 to $44,000, up to 50% of their benefits may be taxed. If they have over $44,000, up to 85% of their benefits may be taxed.

Those thresholds are not adjusted for inflation, which means that over time more beneficiaries pay taxes on their benefits.

Because the new senior bonus is an above-the-line deduction, meaning it is subtracted from gross income to calculate adjusted gross income, it may indirectly reduce tax liability on Social Security benefits.

Who may benefit from the senior ‘bonus’

The additional senior deduction will not affect taxes on Social Security benefits for individuals and couples below those income thresholds, since they already are not subject to levies on their benefits, Gleckman said.

Nor will it help people who earn too much to qualify for the new deduction. Higher-income individuals and married couples with more than $75,000 or $150,000 in modified adjusted gross income, respectively, may not see their Social Security benefit taxes reduced, unless they are in the phaseout window.

For taxpayers who qualify, the senior deduction may reduce, rather than eliminate, their taxes on benefits, Gleckman said. The Urban-Brookings Tax Policy Center estimates that fewer than half of older adults will benefit from the senior deduction, he said.

Even those who benefit won’t necessarily see zero taxes; they’ll just see fewer taxes, Gleckman said.

“The people who benefit the most, we estimate, are people who made between $50,000 and $200,000,” Gleckman said.

The legislation may be more generous to seniors than to taxpayers in other age cohorts, said Alex Durante, senior economist at the Tax Foundation.

“The enhanced adoptions overall are going to reduce tax liabilities for seniors significantly, and for some people, it will probably wipe out any tax liability they have,” Durante said.

“But it depends on where they are in the income distributions,” he said.

How ‘big beautiful bill’ affects Social Security funding

While certain seniors may see financial benefits now, the enhanced senior deduction will cost the Social Security program, which is already under financial strain.

The new additional senior deduction and other changes in Trump’s “big beautiful bill” may reduce taxation of Social Security benefits by approximately $30 billion per year, estimates the Committee for a Responsible Federal Budget.

That would accelerate the projected insolvency date for the Social Security trust fund devoted to retirement benefits to late 2032, up from the currently projected date of early 2033, according to CRFB.

The growth effects from GOP megabill will add to deficit long-term, says CRFB's Maya MacGuineas

To help shore up the program’s funds, Congress faces a choice of raising taxes, cutting benefits or a combination of both.

The sooner any changes are enacted, the more time there is for them to be phased in, according to experts.

“Every year we delay reforming the program means those changes will have to be steeper and affect more people closer to retirement age,” CRFP President Maya MacGuineas wrote in a recent op-ed.

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$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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