THE PACE OF CHANGE SEEMS TO BE ACCELERATING so fast these days that conducting an annual review of your finances might not be enough. Use the questions below throughout the year to check in on your progress toward your goals and discuss any adjustments you might need to make with your advisor.

Find insights on:

• The OBBBA and your taxes
• Lower interest rates and your finances
• Ways to help manage the impact of inflation
• Rising medical costs
• New charitable giving rules

1. How might the One Big Beautiful Bill Act (OBBBA) affect my taxes?

The OBBBA, signed into law in 2025, not only preserved the lower income tax rates and higher standard deduction that were due to expire, but it also introduced new rules that could help minimize your taxes, including the following, according to the National Wealth Strategies (NWS) team in the Chief Investment Office (CIO) for Merrill and Bank of America Private Bank. Be sure to discuss these and other potential tax changes with your tax professional.

The cap on itemized deductions for state and local taxes, or SALT, increases from $10,000 to $40,000 through 2029, which could be especially beneficial for those who pay high state income taxes or local property taxes. Limitations to be aware of: The higher cap phases out for individuals and couples earning $500,000 and above. High earners in the top 37% tax bracket could see a modest tax increase as they may be completely phased out of this increased SALT deduction cap and face a limit on the benefit of their itemized deductions, says the NWS team.

For owners of certain businesses, the 20% “pass-through” deduction on business income was made permanent. Business owners also could benefit from the new depreciation rule (see tip below).

For your estate plan, the highest-impact OBBBA change may be the establishment of permanent estate and lifetime gift tax exemptions of $15 million for individuals and $30 million for couples; those amounts will be adjusted annually for inflation after 2026. New certainty about gift and estate tax exemptions makes this a good time to revisit your estate plan, says the NWS team.

Taxpayers age 65 and older will be able to deduct an additional $6,000 on top of the standard deduction or their total itemized deductions under a new exemption in effect through 2028. It’s phased out for individuals earning from $75,000 to $175,000 and married couples filing jointly earning from $150,000 to $250,000.

2. If interest rates keep going down in 2026, what could that mean for my finances?

“Unless inflation reignites, we expect two additional rate cuts in 2026,” says Matthew Diczok, head of Fixed Income Strategy for the CIO. That could affect your finances in a number of ways. First, if mortgage rates fall to 1 to 2 percentage points below what you’re paying now, it might make sense to consider refinancing, depending on how much longer you expect to remain in your home. There could also be lower rates on lines of credit, such as a home equity line of credit (HELOC) or a Bank of America Loan Management Account, which uses your investments as collateral. “You might consider using such bank loans to pay off other debt with higher rates,” Diczok says. Just make sure you can comfortably make the payments to avoid putting your collateral at risk.

“The flipside of lower borrowing costs is that you’ll earn less interest from saving accounts and money market accounts when rates fall,” says Diczok. To adjust, you might think about moving excess cash to long-term certificates of deposit or other cash management solutions offering higher rates. “Now could also be a good time to review your bond holdings and consider shifting short-term bonds into longer-term bonds that may provide higher yields,” Diczok says.

3. I’m worried about inflation, especially now that I’m nearing retirement. Is there anything I can do to prepare?

“Even a relatively low inflation rate can have a significant impact on the value of your savings and how far your money will go in retirement,” says Nevenka Vrdoljak, senior quantitative investment analyst in the CIO. In 10 years, for example, an inflation rate of just 2.5% would reduce the value of $100,000 to $78,000, and if your retirement lasts, say, 25 years, the value will fall to just $54,000.²

To help limit inflation’s impact, Vrdoljak suggests holding investments that may grow faster than the rise in the cost of living. “That might include equities or real estate,” she says. You may also want to consider adding Treasury Inflation-Protected Securities (TIPS), whose returns are adjusted according to the inflation rate. “If inflation accelerates for any reason, TIPS could help offset that,” she adds.

You can also work with your advisor to craft a strategy for retirement withdrawals that takes inflation into account. If you choose a standard 4% annual withdrawal rate, for example, you could adjust the dollar amount in subsequent years to reflect the inflation rate.

4. Rising healthcare costs have been in the news a lot lately. Should I consider a health savings account?

As just one indication of how quickly healthcare expenses are increasing, the standard premium for Medicare Part B will be nearly 10% higher in 2026, and Part B deductibles will rise, too. Tack on copays, and those costs can add up over a long retirement: A 65-year-old couple who retired in 2025 and opted for original Medicare coverage is projected to need $388,000 in savings to cover Medicare premiums and out-of-pocket costs during retirement.³

Thanks to the triple tax benefits, a health savings account (HSA) could help you prepare for those costs. “An HSA can be a particularly powerful way to save for medical expenses,” says Vrdoljak. (For more on how an HSA works, see “HSAs explained: The top benefits of health savings accounts.”) In 2026, the maximum annual contribution rises to $8,750 for family coverage, and each spouse who is age 55 or older can make a $1,000 catch-up contribution into a separate HSA. Plus, the OBBBA slightly expanded HSA eligibility, including for certain consumers enrolled in a direct primary care arrangement (also known as concierge care). The fee for that service can be paid with HSA funds starting in 2026.

5. Has anything changed in the rules affecting my charitable giving?

Several rule changes will affect tax deductions for charitable contributions, according to the NWS team. The first could benefit those who take the standard deduction — now couples filing jointly will be able to take a $2,000 “above the line” deduction ($1,000 for single taxpayers) for cash gifts to charity.

If you choose to itemize deductions, you’ll be affected by a new floor on charitable deductions equal to 0.5% of your adjusted gross income (AGI). And if you’re in the top income tax bracket of 37%, your itemized deductions — including for charitable gifts — will also be reduced by 5.4%, according to a new formula that counts the deductions as if you were in the 35% bracket.

To determine whether to take the standard deduction or itemize, you and your tax advisor will need to factor in how much you give to charity as well as your other potential deductions, says the NWS team. If you decide to itemize and your AGI is $250,000, for example, the 0.5% floor would reduce a $15,000 charitable deduction to $13,750. To make the most of your charitable deductions, consider making larger contributions in alternate years. Some of that money could go into a donor-advised fund, which gives you an immediate charitable deduction while allowing you to make grants to charitable recipients on your own schedule.

These aren’t the only questions to ask, of course. Check in regularly and keep the conversation going. Your advisor is there to help you at every step of your financial journey.

¹ Fannie Mae, “Housing Forecast: November 2025,” November 13, 2025.

² Based on calculations by the Chief Investment Office, Merrill and Bank of America Private Bank.

³ Milliman, “2025 Milliman Retiree Health Cost Index,” September 2, 2025; coverage costs include original Medicare plus Medigap and Part D plans.

Important Disclosures

The opinions expressed are as of December 5, 2025 and are subject to change.

Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

This material should be regarded as educational information on healthcare considerations and is not intended to provide specific healthcare advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.

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