'Survivor’s penalty’ can follow the death of a spouse — but its impact may be smaller than expected

Peter Cade | Photodisc | Many retirees worry about how threats like inflation , living longer or market volatility could impact their nest egg. But one risk — higher expenses, including taxes after a spouse dies — could be less costly than expected, according to certified financial planner Cody Garrett, founder of Measure Twice Planners in Houston. The issue, known as the " survivor's penalty ," impacts some couples when filing status shifts from married filing jointly to single, which means the widow or widower has a smaller standard deduction and compressed tax brackets . But many surviving spouses fail to see their complete financial picture, and "automatically assume that nothing is changing except for filing status," said Garrett, who is also co-author of the book, " Tax Planning To and Through Early Retirement ." More from Women and Wealth: For 2026, the standard deduction is $32,200 for married couples filing jointly and $16,100 for single filers. Taxpayers age 65 and older get an extra standard deduction of $1,650 per spouse or $2,050 for single filers. President Donald Trump 's " big beautiful bill " also added a temporary senior "bonus" deduction of up to $6,000 per individual ($12,000 for married couples filing jointly) through 2028, with certain income limits . Whether filing single or together, these tax breaks can significantly reduce an older American's effective tax rate, or taxes paid as a percentage of total income. …