O Prophet! Tell your wives and daughters and the believing women that they should draw over themselves their jilbab (outer garments) (when in public); this will be more conducive to their being recognized (as decent women) and not harassed. But God is indeed oft-forgiving, most merciful. (33:59)
And know that women advanced in years, who no longer feel any sexual desire incur no sin if they discard their thiyab (outer garments), provided they do not aim at a showy display of their zeenah (charms or beauty). But it is better for them to abstain (from this); and God is all-hearing, all-knowing. (24:60)
We should draw our Jilbab (outer garments) around us. This means there should be something INSIDE our outside clothes.
If a woman is allowed to take off her thiyab (outer garments) when she is advanced in years, is she now allowed to walk around naked or in her underwear? No. Now she is allowed to wear the clothes she had on inside. This means that the clothes she wears inside her outer garments should also be modest enough to not display your charms or beauty, but still somewhat different than the recognized outer garment.
My rule of thumb: my inside clothes should be modest enough that I could take off my jilbab (outside layer) and still be able to be around other women. This means no inordinate amount of chest showing (because thats icky) and you should be covered from your belly button down to below your knees (this is awrah for women around other women, just like it is awrah for men).