Core Insights - The stock market performed well in 2025, with the S&P 500 gaining approximately 18%, the Dow Jones Industrial Average increasing nearly 13%, and the Nasdaq rising close to 21% [1] - Social Security recipients received a cost-of-living adjustment (COLA) of 2.5% for 2025, which may affect the taxability of their benefits [2] Tax Strategies for Retirees - **IRA Contributions**: Retirees can reduce taxable income by contributing to a non-Roth IRA, even if they have earned income from part-time work [3][4] - **Health Savings Account (HSA)**: Contributions to an HSA can be made tax-free if covered by a high-deductible health plan, allowing for tax-free growth and withdrawals for qualified healthcare expenses [5][6] - **Standard Deduction**: For tax year 2025, the standard deduction is $31,500 for married couples filing jointly and $15,750 for single filers, which may exceed itemized deductions for many taxpayers [7][8] - **State and Local Tax Breaks**: Some states offer tax deductions for contributions to 529 education accounts and other tax breaks for seniors [9][10][11] - **Required Minimum Distributions (RMDs)**: Retirees must take their first RMD by age 73, with options to defer it, which can impact taxable income [13][14] - **Qualified Charitable Distributions (QCDs)**: Retirees aged 70½ or older can donate up to $108,000 from their IRA to charity, which counts toward RMDs and is not subject to federal taxes [15][16][17]