NOT TAX ADVICE: This article is a general educational overview of recent legislation and retirement-related rule changes. It is not tax advice, not a recommendation to take any specific action, and not a substitute for guidance from your CPA, tax preparer, or other qualified tax professional. Before making any tax-related decisions connected to your move, retirement income, property sale, or withdrawal strategy, speak with your own tax expert.
If you’ve been keeping an eye on the news lately, you might have heard about a "tax cliff" coming in 2026. For a long time, the financial world was bracing for the sunset of the Tax Cuts and Jobs Act (TCJA), which would have sent tax rates climbing back to their pre-2018 levels.
But here in 2026, the landscape looks a lot different than we expected. Thanks to the One Big Beautiful Bill Act (OBBBA) and new phases of the SECURE 2.0 Act, the rules for retiring in places like Wimberley have shifted.
Whether you’re planning a move to a modern farmhouse near the Blanco River or looking to downsize into a luxury cottage near the Square, these changes may influence cash flow, housing affordability, and legacy planning. What follows is a general overview of the legislation and how it may relate to a Hill Country retirement. For advice on your own situation, be sure to speak with your tax professional.
The "Tax Cliff" That Never Happened (Mostly)
For years, the big fear was that 2026 would bring an automatic tax hike. We thought the 22% bracket would jump to 25%, and the 24% bracket would hit 28%. If you were planning a big Roth conversion or selling a home to move to Wimberley, you were likely racing to get it done before the clock struck midnight on 2025.
The Update: The OBBBA has extended those lower TCJA tax brackets. For readers following tax-efficient relocations, this is best viewed as part of the broader legislative backdrop rather than a cue to take immediate action.
What could this mean for your move? In general, it may reduce some of the urgency people previously felt around timing a home sale, Roth conversion, or relocation before 2026. But timing decisions around capital gains, retirement withdrawals, and tax brackets are highly individual, so this should be discussed with your own tax professional before acting.
The New "Senior Bonus Deduction": More Cash for Market Days
One of the most exciting additions for 2026 is the Senior Bonus Deduction. Starting with the 2025 tax year and running through 2028, retirees age 65 and older get an extra "thank you" from the IRS.
This is an additional $6,000 deduction per person (or $12,000 for a married couple where both are 65+). This sits right on top of your standard deduction. If you’re a couple living in Wimberley, that’s a significant chunk of income that moves from "taxable" to "tax-free."
For Wimberley retirees, a provision like this could improve after-tax cash flow on paper. You might think of it as potentially freeing up room in the budget for local dining, Wimberley Market Days, or other Hill Country lifestyle expenses. Even so, the real impact depends on your own return, income sources, filing status, and deductions, so it’s smart to review the numbers with your tax expert.
SALT Cap Relief: Good News for Hill Country Homeowners
If you’ve looked at luxury homes in Wimberley, you know that while we don't have income tax, our property taxes can be a bit of a shock. We’ve previously discussed the trade-off between no income tax and high property taxes, and 2026 brings some relief here.
The old $10,000 cap on State and Local Tax (SALT) deductions was a major pain point for retirees moving from low-tax states into high-value Texas properties. Starting in 2026, that cap has been eased significantly. For many taxpayers, the cap has increased to approximately $40,400.
If you are itemizing your deductions, this may allow a larger portion of Texas property taxes to be deductible on a federal return. In educational terms, that could change how some retirees evaluate the after-tax cost of a higher-value home in the Hill Country. But property tax deductibility and its real benefit vary by household, so readers should speak with their own tax professional before making housing decisions based on this rule.
SECURE 2.0: The "Super Catch-Up" Phase
For those of you who are still in the "pre-retirement" phase and planning your move for a year or two down the road, 2026 introduces the Super Catch-Up.
If you are between the ages of 60 and 63, your 401(k) or 403(b) catch-up limit has jumped to $11,250 (for a total contribution limit of over $35,000 in 2026). This is the IRS giving you a green light to "sprint" toward the finish line.
The Catch: If you earned more than $150,000 in the previous year, the IRS now mandates that these catch-up contributions must go into a Roth account. That means the treatment is different from a pre-tax contribution, with potential implications for current taxes, future withdrawals, and even Medicare premiums. Rather than treating this as a one-size-fits-all strategy, it’s better understood as an important planning consideration to review with your own tax and financial professionals.
Wellness and Long-Term Care: A New Tool in the Kit
Retirement in the Hill Country is all about staying active: hiking the trails, swimming at Blue Hole, and staying healthy. But a smart plan always looks at the "what ifs."
Starting in 2026, the SECURE 2.0 Act allows for penalty-free withdrawals of up to $2,500 per year from your retirement accounts to pay for "high-quality" long-term care insurance premiums. While the money is still taxable as income, the 10% early withdrawal penalty is waived if you are under 59 ½.
Even for those over 59 ½, this rule is best seen as part of a broader legislative trend toward more flexible retirement-income rules. Whether using retirement assets this way makes sense is a personal tax and planning question, so readers should review it with their own tax expert.
General Planning Considerations for Your Wimberley Move
With the "tax cliff" effectively postponed, 2026 may look less like a deadline and more like a year for broader review. Rather than a how-to guide, here are a few educational considerations readers may want to discuss with their own tax professionals:
- Roth Conversion Timing: Since brackets aren't spiking as feared, some households may want to revisit how conversions fit into a longer-term plan and how the new Senior Bonus Deduction might interact with taxable income.
- Housing Budget and Property Taxes: With SALT cap relief, the after-tax cost of a home with higher property taxes may look different than it did in 2024.
- MAGI and Medicare Thresholds: As you sell your current home and move, Modified Adjusted Gross Income can still affect higher Medicare costs (IRMAA), regardless of the new deductions.
Because each of these topics can affect your tax picture differently, it’s especially important to speak with your own CPA or tax advisor before making decisions.
Retirement in Wimberley is meant to be a time of peace and creativity, not a time spent wrestling with a spreadsheet. These 2026 changes may be helpful for some retirees, but their impact depends on your personal situation. Use this article as a general educational overview, and make sure to speak with your own tax experts before acting on any of these legislative changes.
Schedule a call with a fiduciary financial advisor today: https://calendly.com/portafoliocapital/15min
Portafolio Capital Management dba Mau Sanchez Capital is a Registered Investment Adviser. This content is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. Advisory services are provided only pursuant to a written advisory agreement.
If you have questions about how these 2026 rules specifically impact your move to Wimberley, or if you want to learn more about Portafolio Capital Management dba Mau Sanchez Capital, visit us at https://portafoliocapital.com/ or give us a call at (512) 593-8380.
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