Podcast Episode - Suze School: What The “Big Beautiful Bill” Means for Your Social Security Benefit

Since so many of you have written to Suze asking about the new “Big Beautiful Bill” and what it will mean for your money, today’s Suze School addresses one of the new law’s aspects: Social Security Benefits.  Suze explains what is new, what stays the same and so much more.

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Podcast Transcript:

Suze: July 27, 2025. Welcome everybody to the Women and Money podcast, as well as everybody smart enough to listen. Suze O here, and today is Suze School, and this podcast, like many of the Suze School podcasts, is where you are going to want to have paper and pencil or your Suze notebook to write down what I'm going to say.

But before I begin—Josh, it is your birthday today, and KT and I wish you the happiest, happiest birthday of all. Josh is Savannah Buffett's husband. We love him so much, I can't tell you. So Josh, I hope we get to see you sooner than later.

All right, everybody, before I even begin what this Suze School is about, I just want to run through what I really think is happening with the stock market.

I've told you that I do think August and September very well could be rough months. If they are and certain stocks go down—or many stocks go down—these will be the perfect two months for you to dollar cost average or go a little bit heavier in the market. Why? Because I still think the Standard and Poor’s 500 is going to end this year between 6700 and 7400. So it's got a nice way to go.

This market for many reasons reminds me of the years between 1995 and 2000. Do you remember those years? The S&P had gains like 34%, 20%, 31%, 27%, 19%. This time, unless something bizarre happens, reminds me of that.

There are sectors I love. You’ve heard me mention them. One I want to be sure you know about: the utility sector. Fabulous. The ETF symbol is XLU. It pays about 2.79% yield—just something to look at.

Also, the XRT retail ETF. It surged 7.1% this past month. I find that very interesting.

Another area I’m watching: REITs. The ETF IYR pays about 2.49%. You want to own REITs in retirement accounts since those dividends are almost always non-qualified and taxed at higher rates.

All these signs tell me that yields are likely going lower. I don’t know when, but I can feel it.

Also worth watching: Berkshire Hathaway (BRK-B), a pure value play. And the high-yield corporate bond ETF HYG, with a 5.77% yield. And as you know, I still like IBIT—the ETF for Bitcoin—for those wanting to enter that space.

So, with interest rates possibly going lower, if everything works out according to plan, take advantage of the one-year certificate at Alliant Credit Union: 4.3% APY for amounts under $75,000; 4.35% for amounts of $75,000 or more. Go to myalliant.com and check it out.

Now—on to what you’ve all asked about: the Big Beautiful Bill. What do you need to know?

This bill covers many things, but since so many of my listeners are close to or already receiving Social Security, today’s Suze School will focus on the parts dealing with Social Security.

If you’re younger, take notes and share this with your parents or grandparents. You need to know this too.

The new law makes the lower federal income tax rates—first implemented in 2017—permanent. These were supposed to expire this year. They are now here to stay. Great news.

The higher standard deduction from 2017 is also made permanent. For 2025, the standard deduction is $15,750 for single filers, and $31,500 for married couples filing jointly. This deduction will now be adjusted annually for inflation. I love that.

There are many other changes in this bill, but over the next few podcasts, I’ll cover them. Today, let’s talk Social Security.

When Social Security began in 1935, benefits were 100% tax-free. In 1983, Congress decided that up to 50% of benefits could be taxed. In 1993, they raised it to 85%. The income limits that determine taxation haven’t changed since 1993. So more and more people are paying taxes on their Social Security—even if they earn modest income from pensions, CDs, or part-time work.

Those thresholds are $25,000 for singles and $32,000 for couples. Go over that, and up to 85% of your benefit can be taxed. Those limits haven’t changed in 30 years.

Important: The new law did NOT change how Social Security is taxed. It added a deduction. It did NOT eliminate taxes on Social Security.

Beginning this year, anyone aged 65 or older may be able to claim a $6,000 income deduction—even if you haven’t started Social Security. There’s no link between this deduction and Social Security.

This is in addition to the existing age-based deductions: $2,000 for single filers, $1,600 per spouse for married couples filing jointly.

So if both spouses are 65 or older, they can get an additional $12,000 deduction—on top of the $3,200 already allowed.

You can claim these deductions whether you take the standard deduction or itemize.

To claim the full $6,000 deduction: Your Modified Adjusted Gross Income (MAGI) must be under $75,000 (single) or $150,000 (married filing jointly).

The deduction phases out by 6 cents per dollar over that limit. It’s fully gone at $175,000 (single) or $250,000 (joint).

Example: If your MAGI is $100,000 (single), that’s $25,000 over the threshold. Multiply 25,000 x 0.06 = $1,500 phase-out. Your deduction drops from $6,000 to $4,500.

This deduction is available for 2025, 2026, 2027, and 2028. It will end in 2029 unless extended. The regular age-based deductions ($2,000 / $1,600) are permanent.

Remember: Social Security is still taxable. This new deduction is just a temporary tax break for income earners over 65 with income under a certain level.

Planning tip: If you're considering Roth conversions in these years, keep this deduction in mind. It may make sense to convert more now before turning 65, or to limit conversions in years you qualify for the deduction to avoid losing it.

This is why I urge you to work with a trusted tax professional to decide what makes the most sense for you.

I hope that clears things up. That’s what you need to know about Social Security and the Big Beautiful Bill—at least for today.

Final reminder: Today, at midnight Pacific Time, is the final chance to get the must-have documents for just $73. Go to musthavedocs.com/birthday — not “must-have-docs,” not just “birthday.” It’s musthavedocs.com/birthday.

This is your last chance before it returns to $99—and it’s going up from there.

That’s your Suze School for today. Miss Travis will be back next week.

There’s only one thing I want you to remember: This is the year for your money to make more money. I told you what I think will happen. I don’t know if it will—but this is the year your money can grow. You just have to take action, and believe in yourself.

Until then, stay safe, stay healthy, and know that we love you very, very much. Bye bye now.