The Tax Perks of Aging: 17 Tax Breaks You Can Claim After 50

Once you hit 50, taxes start working in your favor, if you know where to look. The government, for all its faults, actually hands out plenty of tax breaks to older adults, helping them keep more of their money.
Some of these benefits kick in right at 50, while others appear as you get closer to retirement age. If you play your cards right, you can save thousands each year just by understanding and using these advantages.
A study by the Tax Policy Center found that half of working adults take advantage of tax-favored retirement savings accounts. These accounts are powerful tools, and once you reach a certain age, the tax breaks only get better.
This guide covers 17 tax breaks available after turning 50. Each one has the potential to put more money back in your pocket and set you on the path to financial freedom as you approach retirement.
Are you making the most of these tax breaks? Keep reading to see where you might be leaving money on the table.
Table of Contents
Catch-Up Contributions to Retirement Accounts

Once you turn 50, you’re allowed to put more into your retirement accounts, and that’s an opportunity you don’t want to miss. For 2025, the Internal Revenue Service (IRS) has set the standard 401(k) and 403(b) contribution limit at $23,500.
But individuals over 50 can add an extra $7,500, pushing the total to $31,000. If you’re between 60 and 63, the catch-up limit rises to $11,250, letting you save even more aggressively.
For Traditional and Roth IRAs, the standard limit is $7,000, with an additional $1,000 catch-up contribution for a total of $8,000.
This isn’t just about saving more, it’s about taking advantage of a system designed to reward you for planning ahead.
Related: Should I Max Out My 401k? A CFA Who Retired Young Answers
Increased Standard Deduction

After the age of 65, the IRS lets you take a higher standard deduction, which can make a big difference come tax season. For 2025, the standard deduction for single filers is $15,000, while married couples filing jointly can claim $30,000.
On top of that, you get an additional $2,000 per spouse over 65. This increase might seem small, but when you combine it with other deductions, it can lead to significant tax savings.
It’s one of those “small hinges swing big doors” strategies that’s easy to miss if you don’t know where to look. The key here is understanding how these thresholds apply to you and your family, ensuring you take full advantage of them.
Tax Credit for the Elderly or Disabled

If you’re 65 or older or permanently disabled, you might qualify for a tax credit designed specifically for individuals in these categories. This credit ranges from $3,750 to $7,500, depending on your income and filing status.
To be eligible, your income must fall within certain limits, which vary based on your filing status: single, married filing jointly, or married filing separately. While not everyone will qualify, those who do can enjoy a meaningful reduction in their overall tax bill.
This credit is about more than just saving money, it’s about recognizing the unique financial challenges that can arise as we age.
Related: 21 Lessons a CFA (That Retired Young) Learned That Dave Ramsey Didn’t Teach
Health Savings Account (HSA) Contributions

For those with a high-deductible health plan, turning 55 opens up another savings opportunity: the ability to contribute an additional $1,000 to your Health Savings Account.
In 2025, the HSA contribution limit is $4,300 for self-only coverage and $8,550 for family coverage, meaning that those over 55 can stash away even more.
HSAs are triple tax-advantaged, meaning contributions are tax-deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. This makes them an excellent tool for managing healthcare costs in retirement while still benefiting your bottom line today.
Penalty-Free Withdrawals from Retirement Accounts

Once you reach 59½, you’re no longer subject to the 10% early withdrawal penalty for tapping into your retirement accounts.
While withdrawals from Traditional IRAs will still be taxed as ordinary income, the ability to access these funds without penalties can provide greater flexibility in managing your retirement cash flow.
This is particularly helpful if you’re facing an unexpected expense or making adjustments to your financial plan. Understanding how and when to withdraw from these accounts can make a world of difference in ensuring your money lasts as long as you need it to.
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Charitable Contributions from IRAs

If you’re 70½ or older, you can make Qualified Charitable Distributions (QCDs) directly from your IRA, allowing you to donate up to $108,000 in 2025 without it being counted as taxable income.
These donations must go directly to a qualified charity to qualify, but they’re a win-win: you get to support causes you care about while also lowering your taxable income.
For retirees who no longer need their Required Minimum Distributions (RMDs) for personal use, QCDs offer a strategic way to give back and maximize your tax efficiency.
Mortgage Interest Deduction

If you’re still paying off a mortgage on your primary residence, the mortgage interest deduction can significantly reduce your taxable income. This tax break isn’t exclusive to those over 50, homeowners of all ages who itemize deductions can benefit.
While it often provides more value to seniors with larger loan balances, anyone with a qualifying mortgage can take advantage of this deduction. The savings depend on loan terms, interest rates, and how much interest is paid each year.
Keeping this deduction in mind is one more way to make your finances work harder for you, regardless of your stage in life.
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Medical Expense Deductions

Healthcare costs tend to rise with age, and the IRS allows you to deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
This deduction applies to all taxpayers, not just those over 50, though it often becomes more useful as medical expenses increase later in life. This includes doctor visits, prescription medications, long-term care and even some home modifications that improve accessibility.
Keeping detailed records of expenses ensures that all eligible costs are included. Since health costs can be unpredictable, using this deduction effectively can help offset some of the financial burden.
Property Tax Exemptions for Seniors

Many states offer property tax relief programs for homeowners over a certain age, often 60 or 65. These exemptions or reductions vary but typically lower the taxable value of a home or cap annual tax increases.
Some programs base eligibility on income, while others apply automatically once a homeowner reaches the required age. Property taxes can be one of the largest ongoing expenses in retirement, so it’s worth checking with local tax authorities to see what benefits are available.
Lowering this expense can free up more of your budget for essentials, travel, or even additional investing.
Related: The Real Costs of Homeownership: 25 Expenses That Really Add Up
State-Specific Tax Benefits

Some states are more retirement-friendly than others, offering tax breaks that can significantly impact a retiree’s bottom line. A few states, such as Florida, Texas, and Nevada, have no state income tax, while others exempt Social Security benefits or pension income.
Some states also offer reduced sales tax rates on necessities like groceries and prescription drugs. Since state tax laws change, keeping up with available benefits can help retirees make informed decisions about where to live or how to structure their income.
The right tax strategy at the state level can be just as valuable as federal deductions.
Saver’s Credit

For retirees with lower or moderate incomes, the Saver’s Credit can provide a direct reduction in taxes owed. This tax credit is available to anyone 18 or older who meets the income and contribution requirements, not just those over 50.
Those who contribute to a retirement account, such as an IRA or 401(k), may qualify for a credit of up to $1,000 for single filers or $2,000 for married couples. The percentage of the contribution that qualifies depends on income, with lower-income earners receiving the highest benefit.
Since this is a tax credit rather than a deduction, it directly reduces the amount owed, making it one of the most effective ways to lower taxes while still building retirement savings.
Related: I Retired Early: 25 Things I Know Now About Money That Most People Never Figure Out
Long-Term Care Insurance Premium Deductions

Long-term care insurance can be an essential part of retirement planning, and the IRS allows certain premiums to be deducted as medical expenses.
For 2025, individuals over 70 can deduct up to $6,020 in premiums, while those aged 60 to 69 can deduct up to $4,810. These deductions apply when medical expenses exceed 7.5% of AGI, making them valuable for retirees with significant healthcare costs.
With the rising cost of long-term care, securing coverage and using tax deductions to offset premiums can help preserve retirement savings.
Home Office Deduction

For retirees running a business or working remotely, the home office deduction allows part of housing expenses to be written off. This deduction is available to anyone with a qualifying home office, regardless of age, as long as the space is used exclusively for business purposes.
Once that condition is met, deductions can cover a portion of mortgage interest, property taxes, utilities, and maintenance. The simplified option allows for a flat $5 per square foot deduction, up to 300 square feet.
Many retirees transition to part-time work or consulting, making this deduction useful for those who generate income without commuting. Structuring work properly can turn everyday home expenses into tax-saving opportunities.
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Tax-Free Withdrawals from Roth IRAs

Roth IRAs offer one of the best retirement tax advantages, tax-free withdrawals. As long as the account has been open for at least five years and the account holder is over 59½, both contributions and earnings can be taken out without any tax liability.
Unlike traditional IRAs, Roth accounts also have no Required Minimum Distributions, making them a flexible income source. Since withdrawals don’t count as taxable income, they won’t push retirees into a higher tax bracket or increase Medicare premiums.
Using Roth IRAs strategically can help manage overall tax exposure in retirement.
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Exclusion of Social Security Benefits

Depending on overall income, some retirees can exclude Social Security benefits from taxation. This applies to anyone receiving Social Security, not just those over 50, with taxability based on total income.
The IRS uses a formula called “provisional income” to determine how much of these benefits, if any, are taxable. If provisional income is below $25,000 for single filers or $32,000 for married couples, benefits remain untaxed.
At higher income levels, up to 85% of Social Security benefits can become taxable, but structuring withdrawals strategically can minimize the impact. Adjusting income sources ensures that retirees keep as much of their benefits as possible.
Education Tax Credits

Lifelong learning has financial perks, and education tax credits make going back to school more affordable. The Lifetime Learning Credit allows a tax credit of up to $2,000 per return for tuition and qualifying education expenses.
While many assume education credits are just for younger students, this credit is available at any age. There’s no limit on the number of years you can claim it, making it a great incentive to invest in new knowledge later in life.
If education is part of your retirement or career transition plans, this credit can make a significant difference.
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Investment Income Exclusion for Seniors

Some states provide special tax breaks on investment income or capital gains for retirees. These exemptions can reduce taxes on interest, dividends, or even profits from selling stocks and real estate.
While federal tax rates apply across the board, state-level exclusions can offer meaningful savings for retirees living off investments. With some planning, structuring withdrawals to take advantage of these state benefits can extend the life of a portfolio.
Retirees with significant investment assets should check state-specific rules to avoid paying unnecessary taxes.
Maximize Your Tax Savings

Tax laws are filled with opportunities, but only for those who know where to look. Hitting 50 brings valuable tax breaks that can lower what you owe and keep more cash in your pocket.
Retirement accounts, deductions, and credits all work together to create real savings when used the right way. Some benefits apply at different ages, but the key is knowing what you qualify for and making a plan to use them.
Make these tax breaks work for you, because every dollar saved is a dollar that stays in your future.
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