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As investors approach retirement, it’s not unusual for their attention to turn to how assets are allocated across different investment types and asset classes, such as stocks versus bonds or domestic versus international markets. That’s because an effective asset allocation strategy seeks to align your portfolio with your time horizon (when you will need your money) and risk tolerance (your comfort level with potential investment losses). Your risk tolerance helps to determine the mix of assets that make sense for your portfolio. While choosing the right mix of investments is essential to help investors pursue their goals for another 20, 30, or more years in retirement, deciding where assets are held— asset location —may help improve tax efficiency throughout this next exciting stage of life. What Is Asset Location? Asset location refers to where assets are held or “located,” such as a bank savings account, direct-held mutual fund, real estate property, or a brokerage account. Because asset location directly influences the long‑term management of retirement income, it’s essential to a tax-sensitive approach to managing income in retirement. How Does It Work? By seeking to align each asset with the most appropriate account type, asset location helps to determine thetax efficiencyof a portfolio. This may influence after‑tax outcomes for retirees seeking to draw down on their assets in a more tax-efficient manner. A strategy that seeks to coordinate taxable, tax-deferred, and tax-free assets, may also help provide increased flexibility in adapting to evolving income needs, personal circumstances, and tax laws changes over time. Why Tax Diversification Matters During Retirement Tax diversification is the process of spreading investments across different types of accounts, such as taxable, tax-deferred, and tax-free, in an effort to help manage tax liabilities in retirement. A coordinated approach is important because different sources of income may be taxed differently. During retirement, most people will derive their income from one or more of the sources listed below: Social Security benefits Retirement plans (e.g., IRA, 401(k), or 403(b) accounts) Pension Personal investments Income-generating real estate Business interests Required minimum distributions (RMDs) Most retirement assets fall into one of three tax categories, each with different characteristics and potential planning considerations. 1. Taxable accounts include individual or joint brokerage accounts and many bank or investment accounts that are funded with after-tax dollars. These accounts generally offer: No age restrictions for accessing funds Flexibility for withdrawals Potential capital gains tax treatment when investments are sold Annual taxation on certain interest, dividends, or realized gains Although these accounts may generate taxes each year, they often provide valuable flexibility because withdrawals themselves are generally not fully taxable. 2. Tax-deferred accounts include  Traditional IRAs, SEP IRAs, SIMPLE IRAs, and many employer-sponsored retirement plans such as traditional 401(k)s are examples of tax-deferred accounts. These accounts generally provide: Potential tax deductions on pre-tax contributions (if eligible) Tax-deferred investment growth Ordinary income taxation on qualifying withdrawals Required Minimum Distributions (RMDs) beginning at the applicable age under current law Tax-deferred accounts can be valuable asset accumulation vehicles during your working years, but distributions later in retirement may affect taxable income. 3. Tax-free accounts include Roth IRAs and Roth 401(k)s, which are funded with after-tax dollars, allowing qualified withdrawals to generally be received free from federal income tax, assuming IRS requirements are satisfied. Potential advantages include: Tax-free qualified withdrawals Greater flexibility in retirement income planning No Required Minimum Distributions for Roth IRAs during the owner's lifetime under current law Potential tax-efficient wealth transfer opportunities Not everyone qualifies to contribute directly to every Roth account, and conversion strategies should always be evaluated carefully. Coordination is Key While asset location and tax diversification are important considerations for any retirement income strategy, they don’t exist in a vacuum. A comprehensive approach requires careful  coordination and evaluation of these and other aspects of wealth planning: Goal planning Income/cash flow planning Estate planning/legacy objectives Investment management Ongoing tax planning Taking a holistic view of your financial situation and goals may help support more informed decisions aligned with your values and objectives. Building Flexibility in Retirement Keep in mind that state and federal tax laws evolve over time, and retirement may last for several decades. While no one can predict future tax law changes with certainty, building flexibility into your financial strategy may make it easier to adapt as tax laws evolve. Maintaining assets across multiple tax categories may also create more options when making future income decisions. At Return on Life Wealth Partners, we focus on compressive financial planning that seeks to coordinate each piece of your financial puzzle. If you'd like to learn more about the role asset location can play in a tax efficient retirement income strategy, we welcome the opportunity to talk about what matters to you. Important Disclosure This material is provided for informational and educational purposes only and should not be construed as tax, legal, or accounting advice. Return on Life Wealth Partners does not provide tax or legal advice. Individuals should consult with their qualified tax and legal professionals regarding their specific circumstances before implementing any planning strategy. References to tax laws are based on current regulations, which are subject to change. Investing involves risk, including the possible loss of principal. Any strategies discussed may not be suitable for all individuals. Information is believed to be accurate as of the date of publication but may not be complete or updated for subsequent changes in law or regulation. Any forward-looking statements are based on current assumptions and are subject to risk and uncertainty. Past performance is not indicative of future results. Investment advisory services are offered through Planned Financial Services, LLC, dba Return on Life Wealth Partners, an SEC-registered investment adviser.

As the end of the year approaches, now is the time to take advantage of tax strategies that seek to help reduce taxable income, optimize savings, and start the new year on a stronger financial footing. And this year, planning ahead is especially important. With the passage of the One Big, Beautiful Bill Act (OBBBA) in July 2025 — a sweeping package of tax adjustments and new incentives — individuals and business owners have several new opportunities to help improve their tax outlook. Some provisions apply retroactively to January 1, 2025, some phase out after 2028–2029, and a handful are permanent. State conformity will vary, so federal and state impacts may differ as filings come due. These foundational changes set the stage for several planning opportunities. Below, we break down some of the most valuable tax planning considerations to address before December 31st. 1. New Senior Bonus Deduction for 2025 - 2028 The OBBBA introduced significant changes, including one that may allow seniors to keep more of their income in retirement working for them, whether they itemize on their returns or take the standard deduction. Senior Bonus Deduction: In addition to the pre-existing, higher standard deduction for 2025, which is  $15,750 for single filers, $23,625 for heads of household, and $31,500 for married filing jointly, taxpayers age 65+ who itemize or take the standard deduction may be eligible to receive the new $6,000 senior bonus deduction ($12,000 per couple if both spouses are eligible). The temporary bonus deduction for tax years 2025 – 2028 can be combined with the pre-existing higher standard deduction for taxpayers 65+, which is $2,000 for single filers and $1,600 per eligible spouse for married couple filing jointly. The deduction begins to phase out when Modified Adjusted Gross Income (MAGI) exceeds $75,000 for single filers and $150,000 for married filing jointly. It is not available to married couples filing separately. 2. Additional Temporary Tax Deductions Beginning in 2025 The OBBBA created several new deductions that may provide meaningful savings for taxpayers — especially because they apply even if you do not itemize. The following deductions apply to tax years 2025 – 2028: “No Tax on Tips” Deduction: Workers in certain IRS-listed occupations may deduct up to $12,500 (single filers) or $25,000 (married filing jointly) in tip income. Proper reporting and documentation will be required. The deduction begins to phase out for taxpayers with MAGI over $150,000 for single filers/$300,000 for married filing jointly. Overtime Premium Deduction Eligible workers can deduct the “half-time” portion of time-and-a-half overtime pay, up to the same income and phase out limits as the tip deduction. The deduction only applies to federal income taxes. Overtime pay remains subject to FICA and any applicable state and local taxes. Personal Car Loan Interest Deduction From 2025–2028, taxpayers may deduct up to $10,000 of interest on a loan for a qualifying new personal-use vehicle (used and leased vehicles do not qualify). The deduction begins to phase out for taxpayers with MAGI over $100,000 for single filers/$200,000 for married filing jointly. 3. Maximize Retirement Plan Contributions Before Year-End Contributing to retirement accounts remains one of the most powerful ways to reduce taxable income while pursuing your important long-term savings goals. 401(k), 403(b), and 457(b) Plans: 2025 maximum employee deferral for participants under age 50: $23,500 Age 50 – 59 and 64+ catch-up contribution amount: $7,500 Special age 60–63 catch-up (new in 2025): $11,250 Total possible deferral for participants age 60–63: $34,750 2025 contributions must be made by December 31, 2025 Traditional & Roth IRAs: Limit: $7,000 Age 50+ catch-up: $1,000 (for a maximum contribution of $8,000) Taxpayers have until April 15, 2026, to make tax-year 2025 contributions Planning considerations: Roth conversions can be attractive while tax rates remain relatively low. Watch income-related Medicare premium brackets (IRMAA). Backdoor Roth strategies and mega-backdoor Roths (when permitted by your plan) continue to be viable for certain taxpayers. Consult with your tax and financial professionals before pursuing theses or other strategies. 4. Charitable Giving Strategies — Especially for Seniors For taxpayers age 70½ or older, Qualified Charitable Distributions (QCDs) remain one of the most tax-efficient tools available for pursuing philanthropic interests. QCD highlights: 2025 QCD limit: $108,000 for individuals, $216,000 for married couples Counts toward your required minimum distribution (RMD) Excluded from adjusted gross income AGI (helps with IRMAA and other phaseouts) The distribution must be transferred directly from your IRA by your IRA administrator to a qualified 501(c)(3) charitable organization. A QCD cannot be made to donor-advised funds or private foundations. It must be completed by December 31 to qualify for the current tax year. Strict rules apply so be sure to consult with your tax and financial professionals before initiating a QCD. Planning considerations: The OBBBA introduced a new charitable “floor,” beginning in 2026. That makes QCDs even more attractive to eligible taxpayers because they sidestep itemized deduction thresholds entirely. If you’re not eligible to make a QCD, consider “bunching” charitable gifts into 2025 — especially if using a donor-advised fund — to help maximize itemized deductions under current rules. 5. SALT Deduction Planning Under the New $40,000 Cap From 2025–2029, the federal SALT limit increases significantly to: $40,000 per return for single filers, heads of household, and married couples filing jointly ($20,000 for married filing separately) Planning considerations: High earners may benefit from prepaying certain state and local taxes where allowable. However, some states may take months (or years) to conform to federal rules, so confirm state-specific guidance before acting. For high-net-worth households, advanced trust strategies may offer additional SALT deduction flexibility — but should only be explored with a specialist and in alignment with broader estate planning objectives. 6. Smart Gifting and Estate Planning Moves Annual gift exclusion (2025): $19,000 Lifetime exemption (2025): $13.99 million Planning Notes: Effective January 1, 2026, individual taxpayers are eligible to gift up to $15 million during their lifetime ($ 30 million for married couples) without incurring federal gift tax or using up your estate tax exemption. This amount was made permanent under the OBBBA (unless changed by future legislation) and is indexed annually for inflation. The IRS has confirmed there will be no clawback for gifts made under the higher exemption amounts if the threshold drops in future years. 7. Year End 529 Education Planning Opportunity Superfund a 529 Plan Taxpayers can “superfund” 529 education savings accounts by front-loading up to five years of contributions. However, tax benefits can vary by state, so be sure to confirm applicability with your tax professional. Under the current gift tax exclusion, which is $19,000 per recipient in 2025, taxpayers can contribute up to: $95,000 for single filers $190,000 for married filing jointly (gift-splitting) Keep in mind, IRS Form 709 must be filed in the year of the contribution to make the five-year election. No additional contributions can be made to the same 529 plan for the same beneficiary during the five-year period without affecting the lifetime gift tax exemption. Consult a qualified tax or legal professional before pursuing this or other strategies. 8. Income Splitting & Hiring Your Children For family-owned businesses, hiring children can be a tax-smart strategy — especially under sole proprietorships or partnerships owned only by the parents. Key benefits include: No FICA (federal payroll tax) on wages for children under 18 No FUTA (unemployment tax) for children under 21 Wages may fall under the child’s standard deduction Children with earned income can fund a Roth IRA (up to $7,000 in 2025) Corporate entities (S-corps, C-corps) do not receive these FICA/FUTA exemptions. 9. Powerful Tax Tools for Business Owners 100% Bonus Depreciation Is Back and Permanent Available for most tangible personal property placed in service after January 19, 2025. Excellent for equipment, machinery, vehicles, and cost-segregated components of real estate. R&D Expensing Restored (Domestic) Full expense returns for domestic R&D activities for years beginning after December 31, 2024. Section 179 Expensing 2025 limit: $1,250,000 Phaseout begins at $3,130,000 Review Interest Deductibility under §163(j) The revised rules limit the deduction to 30% of adjusted taxable income plus business interest income. Modeling leverage vs. deductions is critical. Evaluate Entity Selection and Compensation Mix §199A (QBI deduction) is now permanent, with minimum deduction rules beginning in 2026. It may be worth revisiting S-corp, partnership, or C-corp structures. 10. Your “Before December 31” Action Checklist Before the ball drops, consider the following which must be completed by December 31 st: Max-out employer-sponsored retirement plans and catch-up contributions, if eligible. Evaluate the potential for a Roth conversion. Complete charitable gifts and/or execute QCDs, if eligible. Prepay SALT where beneficial under the new $40k cap. Harvest investment gains or losses. Make annual gifts or superfund 529 plans. For business owners: Take advantage of 100% bonus depreciation. Use Section 179. Document R&D expenses. Review interest deductibility. Consider hiring your children (where applicable). Your business structure may determine eligibility, so consult with a tax professional before initiating these or other strategies. Final Thoughts: Align Tax Planning with Your Financial Plan Tax planning should support your broader financial goals — not drive them. Or as we like to say, don’t let the tax tail wag the financial dog. As we approach year-end, take the time to meet with your tax professional and financial advisors to evaluate the strategies that are applicable and make the most sense for your situation. If you’d like personalized guidance, our team is here to help. Visit ReturnOnLifeWealth.com or call 440.740.0130 to schedule a consultation. This material is considered a general communication for educational purposes only and does not take into account any investor’s specific objectives, financial situation, or needs. It should not be construed as personalized investment, tax, or legal advice, nor as a recommendation to engage in any specific strategy. Return on Life® Wealth Partners does not provide legal advice. Individuals should consult their tax or legal professional regarding their unique circumstances. Strategies and examples described herein are for illustrative purposes only. No guarantee of outcome is implied or should be inferred. All investments involve risk, including possible loss of principal. Investment advisory services offered through Planned Financial Services, LLC, dba Return on Life ® Wealth Partners, an SEC-registered investment adviser.