When hearing from senior citizens, they often tell me the biggest challenge they face today is managing the rising cost of living while on a fixed income.

That is why my Joint Finance Committee colleagues and I wrote a provision in the 2025-27 state budget that allows older adults to keep more of the money they have earned.

More specifically, any full-time Wisconsin resident aged 67 and older can now subtract up to $24,000 of eligible retirement income from their state taxes.

This includes federally taxable payments and distributions from qualified retirement plans and IRAs, like 401(k)s, 403(b)s and private pensions. Social Security benefits and U.S. military pensions are already fully exempt from Wisconsin taxes.

Because of the budget, individual senior citizen filers can expect to see an average annual savings of $705. For married joint filers, the average is $1,242.

For next week’s “Testin’s Throwback Thursday,” we will discuss the Legislature's decision to eliminate sales taxes on residential electricity and natural gas bills.