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Nearly every year, regardless of larger legislation like the One Big Beautiful Bill Act, the IRS increases income thresholds on tax brackets. This could change your marginal tax rate, or the highest tax rate you pay on your income. The IRS also typically increases the standard deduction annually, in line with other inflation adjustments. At the same time, Social Security typically issues cost-of-living adjustment (COLA) increases, putting more money in the monthly checks of those collecting Social Security benefits in retirement.Read:Gen X becomes the most influential global consumers, according to studyDiscover:More personal finance articles for seniorsThese changes have tax ramifications that affect retirees on a fixed income and older adults still in the workforce.   New Income Thresholds for 2026Income thresholds that determine tax brackets increased by roughly 2.8%, which tracked closely with inflation from December 2024 to December 2025, according to Consumer Price Index (CPI) data. Inflation rose roughly 2.4% between January 2025 and January 2026, based on data from The Economics Daily from the US Bureau of Labor Statistics.These are the new income thresholds for the current (2026) tax year. Keep in mind, these numbers affect tax filings due April 15, 2027 – not tax returns due in 2026.Marginal rateIndividual incomeMarried couples filing jointly10%Up to $12,400Up to $24,80012%$12,401 to $50,400$24,801 to $100,80022%$50,401 to $105,700$100,801 to $211,40024%$105,701 to $201,775$211,401 to $403,55032%$201,776 to $256,225$403,551 to $512,45035%$256,226 to $640,600$512,451 to $768,70037%Over $640,600Over $768,700The increase could bode well for retirees, according to Joe Marmorato, CFP, CPA, senior tax strategy advisor at Savant Wealth Management.“A larger share of a taxpayer’s income will now fall into lower tax brackets. This means that seniors earning roughly the same amount as the previous year may end up owing less in federal income taxes this year,” he said.If you’re still working, you may want to evaluate the withholding taxes in your paycheck to see if you should adjust how much the government takes out. Ideally, you don’t want to owe taxes when you file, but you also don’t want a huge tax refund.A large tax refund only means you gave the federal government an interest-free loan for part of the year, which the IRS gives back in the form of a refund when you file your taxes. Combined with other inflation adjustments, including a larger standard deduction and a deduction for seniors, the 50+ crowd could enjoy a few windfalls for the 2026 tax year.Standard Deduction Boost Could Yield Higher Tax RefundsThe standard deduction, or the amount you can deduct from your gross household income if you don’t itemize, increased from $15,750 for single taxpayers (or married, filing separately) to $16,100. Married couples filing jointly can deduct $32,200, up from $31,500. Those filing head-of-household can deduct $24,150, up from $23,625, according to an IRS news release. Don’t Forget the Enhanced Senior DeductionBetween 2025 and 2028, seniors ages 65+ can claim an additional $6,000 per person standard deduction, which means married couples where both spouses are 65+ can write off an additional $12,000. The deduction starts phasing out for taxpayers with a Modified Adjusted Gross Income (MAGI) of $75,000 ($150,000 for married filing jointly), and is eliminated when income hits $175,000 or $250,000, respectively.“These increased refunds can boost disposable income, potentially supporting consumer spending and therefore contribute to broader economic growth,” Marmorato said.Social Security IncreasesOn the other hand, Social Security’s annual COLA increase may not have as much of an effect on the economy – or on retirees’ wallets. The 2.8% COLA increase exceeded inflation but failed to keep pace with many other rising costs. “Essential costs such as healthcare and housing continue to rise at a faster pace than 2.8%, which could force some seniors to cut back on discretionary spending,” Marmorato said. “This pullback could end up slowing growth in industries that rely heavily on older consumers.”On the bright side, he added, “The fact that tax bracket thresholds increased more than the Social Security COLA bodes well for seniors, as their taxable income is less likely to creep into higher brackets.”2026 Tax Outlook for SeniorsThe next few years could leave more money in the wallets of many older taxpayers thanks to a larger standard deduction and the $6,000 senior deduction for those who don’t exceed the income threshold. Maximum monthly Social Security benefits also increased in 2026, which is good for retirees.However, Marmorato said, “The Social Security taxation thresholds don’t adjust for inflation, so more seniors end up having more of their benefits taxed each and every year regardless of how big or small the cost-of-living adjustment is.”Additionally, the higher taxable earnings cap for Social Security taxes increased to $184,500, up from $176,100 in 2025, which can affect workers’ take-home pay.If you haven’t already started tax planning for this year, it’s a good time to speak with a tax professional. Inflation adjustments may balance out for some taxpayers, but knowledge is power.Related: Watch for tax scams targeting Gen X and Boomers

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For the nine decades since the Social Security Act was passed in 1935, Social Security has delivered every check to American retirees on time, but the program’s long‑term finances can no longer be ignored. Anxiety is rising, as only 36 percent of adults in AARP’s latest Social Security survey said they felt very or somewhat confident about the program’s future. AARP, the nonprofit advocacy group for Americans over 50 years old, is urging Congress to move quickly to shore up the system.The trust funds that help ensure full benefit payments are projected to be exhausted by 2034, according to the most recent Social Security Board of Trustees’ report. If lawmakers fail to act before then, the program will have enough revenue to cover only 81 cents of every dollar owed to beneficiaries.​​“It’s something that Congress needs to fix, but it’s an absolutely fixable problem,” said Bill Sweeney, AARP’s senior vice president for government affairs.”“The longer Congress waits, the worse their options are, so we’ve really been pushing [them] hard … to get focused on this,”  Sweeney emphasized.Myechia Minter-Jordan, AARP CEO, discussed the widespread popularity of Social Security.“AARP members and older Americans nationwide consistently say that the future of Social Security and Medicare are the issues they care about most, and they stand ready to hold politicians across party lines accountable to strengthen these programs for the long term,” she said.AARP warns Americans on Medicare penalties to avoidSocial Security manages enrollment for Medicare Part A, which covers hospital care, and Medicare Part B, which pays for outpatient medical services.In carrying out that responsibility, the Social Security Administration works alongside the Centers for Medicare & Medicaid Services to explain Medicare enrollment choices to older adults, handle their applications and collect certain premiums.More on personal finance:Zillow forecasts big mortgage change for U.S. housing marketAARP sounds alarm on major Social Security problemDave Ramsey bluntly warns Americans on 401(k)sThe AARP has a warning for people who wait too long to enroll in Medicare.”You can be charged up to 10 percent more for Medicare Part B — the part of Medicare that provides standard medical insurance — for each full year past the eligibility age of 65 that you delay enrolling,” wrote AARP. “That is, 10 percent if you waited 12 months, 20 percent if you waited 24 months, and so on.””The penalty is applied permanently to your premiums, and it adds up,” AARP cautioned. “Medicare Part A, which covers hospitalization, costs nothing for most recipients, but Part B carries premiums.””The base rate in 2026 is $202.90 a month. If you’re carrying a one-year late fee, you’ll pay an extra $243.48 for Part B in 2026 and bigger surcharges in future years as premiums rise.”Important notes on Medicare enrollmentYou can delay enrolling in Part B at 65 without a late penalty if you are still employed and covered by a group health plan offered by an employer with at least 20 workers.You can postpone Part B without a penalty if you are covered under your working spouse’s group health insurance, following the same rules that apply to your own employer coverage.You can avoid a late fee if you already have Part A and later develop end‑stage renal disease.You will be enrolled automatically in Medicare Parts A and B at 65 if you are already receiving Social Security benefits, although you may decline Part B by contacting the Social Security Administration.You have a seven‑month initial enrollment window surrounding your 65th birthday to sign up for Medicare if you are not yet collecting Social Security.(Source:AARP)

AARP explains financial challenges Americans face regarding Social Security and Medicare.Shutterstock

Social Security solvency optionsCongress will need to take action to ensure Social Security can continue paying the full benefits Americans have earned and to chart a long‑term plan for strengthening the program’s finances. Any effort to do so could involve a range of potential adjustments. A U.S. Government Accountability Office (GAO) report outlines for Congress four categories of options, focusing on their financial implications.Policymakers could strengthen Social Security’s finances by reducing program costs, which could involve changing eligibility rules or adjusting benefit amounts for current or future beneficiaries.Policymakers could improve the program’s outlook by increasing revenues, either by raising additional payroll tax income within the current structure or by bringing in new funding from outside existing Social Security revenue sources.Policymakers could adopt reforms with mixed or uncertain financial effects, such as extending Social Security coverage to state and local government workers who are currently excluded, a change that would boost revenues at first but increase long‑term costs.Policymakers could pursue reforms aimed at nonfinancial goals, such as protecting vulnerable beneficiaries or modernizing benefits, even though these steps could make it more difficult to resolve Social Security’s long‑term funding challenges.(Source:U.S. Government Accountability Office)Related: AARP warns Americans on major 401(k) problem

Broadcom (AVGO) stock is down about 8% year to date, but its latest quarter made one thing hard to ignore.The AI trade may not be cooling as much as investors feared.Broadcom is now generating real AI-driven revenue from hyperscalers, not just talking about future potential.At the same time, VMware is shifting the business toward more recurring software revenue, helping support margins and stability.The question now is whether this momentum can continue.In simple terms, Broadcom helps power the infrastructure behind AI, supplying custom chips and networking solutions used by hyperscalers, while also owning a growing software platform through VMware.Its advantage comes from deep relationships with large customers and a model that combines high-margin software with mission-critical hardware.If AI demand holds and execution stays strong, the long-term story looks compelling. AI revenue becomes a scaled profit driverBroadcom’s fiscal first-quarter 2026 report made clear that AI infrastructure is now a meaningful earnings engine, not just a long-term narrative.The company posted first-quarter revenue of $19.31 billion, up 29.5% from a year earlier, topping guidance as hyperscaler demand for custom AI accelerators and networking gear moved into volume deployment.CEO Hock Tan noted on the earnings call that “growth was driven by AI semiconductor revenue, which grew 106% year-on-year to $8.4 billion, way above our outlook. In Q2, this momentum accelerates, and we expect semiconductor revenue to be $14.8 billion, up 76% year-on-year.”That underscored that AI is already showing up in reported results at scale.More AI Stocks:Morgan Stanley sets jaw-dropping Micron price target after eventBank of America updates Palantir stock forecast after private meetingMorgan Stanley drops eye-popping Broadcom price targetBroadcom is already monetizing AI infrastructure, which could push 2026 and 2027 estimates higher if demand holds.UBS analyst Timothy Arcuri said the company’s fiscal 2027 outlook “seems very conservative,” and raised his AI chip revenue estimate to over $130 billion, up from $106 billion.That also strengthens Broadcom’s standing as one of the clearest AI spending beneficiaries outside Nvidia.VMware lifts software quality and margin durabilityBroadcom’s quarter also showed that VMware is integrating more smoothly than many investors expected, with subscription conversion into VMware Cloud Foundation improving the software mix.Broadcom reported GAAP net income of $7.35 billion and non-GAAP net income of $10.19 billion in the first quarter.The bigger story was the quality of those earnings, as a larger recurring software base can support stronger margins and reduce dependence on swings in the semiconductor cycle.If VMware Cloud Foundation adoption and annual recurring revenue conversion continue to run ahead of plan, investors have a stronger case for assigning a higher multiple based on steadier cash flow and lower cyclicality.CEO Hock Tan noted in the first quarter call that, “We are confident that the growth in generative and agentic AI will create the need for more VMware, not less.”With software helping anchor the earnings base, the next question is how much more Broadcom can capture from AI infrastructure spending beyond custom silicon.Ethernet momentum expands Broadcom’s AI wallet shareEthernet is increasingly being viewed as a credible architecture for large training clusters.As Broadcom’s COO Charlie Kawwas said, “We’ve announced with multiple hyperscalers and many of our peers in the semiconductor industry that Ethernet scale-up is the right choice… We’re being asked to scale-up through Ethernet, and we’re happy to enable that.”If hyperscalers keep building AI systems around Ethernet fabrics, Broadcom’s opportunity widens beyond custom compute silicon and into switching and interconnect, increasing the company’s content per deployment.That gives Broadcom a broader claim on AI infrastructure budgets through platforms tied to Tomahawk and Jericho, rather than leaving the company reliant on any single accelerator program.

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As the Ethernet debate shifts from whether it can scale in AI to how fast adoption grows, Broadcom’s networking portfolio looks increasingly central to the next leg of AI buildouts.Broadcom’s upside could come from:Expanding custom AI chip deployments as hyperscaler partners scale XPU programs into broader production,Higher AI networking attach rates that increase revenue per customer alongside accelerator demand,Continued strength in hyperscaler and enterprise AI spending that supports sustained semiconductor growth,VMware’s transition to subscription contracts is improving revenue visibility and recurring cash flow,Operating leverage from a richer mix of software and AI-driven revenue supporting margin expansion,Deeper multi-product relationships with large cloud customers that increase switching costs and long-term revenue durability,Strong free cash flow generation enabling faster debt paydown and potential shareholder returns.Key risks that could pressure BroadcomA slowdown in hyperscaler AI infrastructure spending that delays custom silicon ramps,Failure to convert current AI design wins into large-scale, long-term production programs,Integration risks from VMware, including potential customer churn or pushback on pricing changes,Margin pressure if revenue mix shifts toward lower-margin hardware or if operating costs rise,Increased competition in custom AI silicon from players like Nvidia (NVDA) and Advanced Micro Devices (AMD),Concentration risk with a small number of large hyperscaler customers driving a significant portion of growth,Broader enterprise or cloud spending slowdowns that weigh on infrastructure and software demand.Broadcom’s key takeawaysBroadcom’s fiscal Q1 2026 revenue jumped 29% year over year to $19.3 billion, showing AI demand is already flowing through the numbers.Hyperscalers are ramping custom accelerators and networking, expanding Broadcom’s role across AI infrastructure, while VMware is boosting recurring revenue and supporting margins through subscription growth.Ethernet adoption in AI clusters adds another upside lever, though risks remain if AI spending slows, competition intensifies, or VMware execution slips.Related: Wells Fargo has a message on Amazon, Meta and Alphabet stocks

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