Year-End Tax Planning: Smart Moves to Make Before December 31st

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.

For many business owners, the term ‘liquidity event’ immediately brings to mind a complete sale of the business. While a full business exit is one path, it’s far from the only one. What Is a Liquidity Event? Throughout a business owner's journey, there may be opportunities to access liquidity through partial sales, recapitalizations, ownership transfers, or other strategic transactions that provide financial flexibility while allowing continued involvement in the business. For founders and key employees, these events are often life-changing financial milestones, allowing them to cash out or diversify their personal wealth away from a single concentrated business asset. Because these events can significantly impact both personal and business finances, thoughtful planning before a transaction occurs can be critical for creating greater flexibility and alignment with long-term goals. Understanding Different Types of Liquidity Events Liquidity events take many forms, each carrying its own set of risks, potential opportunities, and important considerations. For instance, a business owner may decide to sell a minority stake to an outside investor to support future growth. Others may participate in a recapitalization, exchanging a portion of their ownership for liquidity while retaining operational control. Some owners pursue gradual ownership transitions through family succession plans, management buyouts, or employee ownership arrangements. In each case, the transaction creates a potential opportunity to convert a portion of a business asset into personal liquidity. However, the structure of the transaction often influences taxation, cash flow, estate planning considerations, and future business decision-making. Understanding the potential paths available to business owners can help them evaluate opportunities more effectively when they arise. Recognizing the Value of Early Planning A common challenge surrounding liquidity events is timing. Many transactions move quickly once discussions begin, leaving limited opportunity to address planning considerations after the fact. Planning well in advance of a liquidity event allows business owners to evaluate potential outcomes before key decisions are made. This may include reviewing ownership structures, understanding tax implications, assessing personal cash flow needs, and identifying how proceeds could support broader financial objectives. By bringing professional legal, tax, and financial advisors into the conversation before a transaction is imminent, owners may have more flexibility to explore options, evaluate risks, and consider strategies that may not be available later in the process. Evaluating Tax and Cash Flow Considerations In many cases, a liquidity event can significantly impact an owner's financial position. In addition to receiving proceeds, owners may encounter new tax obligations, shifts in income sources, and changes in long-term cash flow planning. The timing and structure of a transaction can influence how proceeds are taxed. Depending on the circumstances, considerations may include capital gains taxes, installment payments, retained equity interests, or future earn-out arrangements. Beyond taxation, business owners should evaluate how proceeds may fit into their overall financial framework. Questions may include: How much liquidity is needed to support current lifestyle needs? What portion should remain available for future opportunities? How should risk exposure change after receiving proceeds? What adjustments may be necessary to support retirement or legacy objectives? Addressing these questions in a proactive manner may help provide greater clarity as financial circumstances evolve. Aligning Decisions with Long-Term Goals Liquidity events represent more than financial transactions. They can serve as a catalyst for broader planning discussions about family priorities, retirement objectives, philanthropy, business ventures, legacy, and wealth transfer strategies. Proceeds from a liquidity event may provide some owners the flexibility to pursue new entrepreneurial opportunities. Others may focus on creating sustainable retirement income or establishing a long-term legacy plan for future generations. However, without a clear framework it can be easy for short-term decisions to overshadow long-term priorities. Taking time to define objectives before proceeds are received may provide an opportunity to align financial decisions with personal values and future goals. Planning ahead can also help reduce uncertainty during what is often a significant transition period. Maintaining Perspective During Transition Liquidity events frequently involve both financial and emotional considerations. Even when an owner remains involved in the business, a transaction can represent a significant milestone after years or decades spent building an organization. Since periods of transition can bring uncertainty alongside opportunity, maintaining perspective and focusing on long-term objectives may help owners navigate changing circumstances with greater confidence. Rather than viewing a liquidity event as an isolated transaction, it may be helpful to view it as part of an ongoing planning process where strategies adapt over time as business conditions, personal goals, and market environments evolve. Ready to Continue the Conversation? Whether a liquidity event is years away or already under consideration, thoughtful preparation may help better position today's decisions to support tomorrow's objectives. At Return on Life Wealth Partners, we help business owners think beyond the transaction and focus on what comes next. Call us at 440.740.0130 to talk about business exit planning strategies tailored to your goals. Visit us anytime at ReturnOnLifeWealth.com. Important Disclosures Investment advisory services are offered through Planned Financial Services, LLC, dba Return on Life Wealth Partners, an SEC-registered investment adviser. This material is for informational purposes only and is not intended to provide, and should not be relied on for, investment, tax, or legal advice. You should consult your own financial, tax, or legal professionals before making any decisions based on this information. All investing involves risk, including the possible loss of principal. Any strategies discussed may not be suitable for all individuals. Business exit planning strategies discussed are educational in nature and may not be appropriate for all business owners or situations. Discussions related to business exit planning, succession planning, valuation readiness, legal risk management, or ownership transition strategies should not be interpreted as personalized recommendations. Outcomes vary significantly based on individual facts, circumstances, and timing. This content does not constitute an offer to buy or sell securities or financial instruments. This content may not be copied or distributed without express written consent. For additional information, please refer to our Form ADV Part 2A Brochure, available upon request or at https://www.adviserinfo.sec.gov.

There’s a moment many families experience but few plan for: That late-night phone call, the unexpected hospital visit, the sudden realization that a parent who once managed everything independently may now need help making decisions. In that moment, you’re not just dealing with emotion, you’re making critical financial, medical, and logistical decisions under pressure. The best time to plan for the future needs of aging parents is well before a crisis, when circumstances can force hasty decisions. Why a Proactive Approach Matters More Than Ever On average, people are living longer. That’s a good thing. However, longer life spans can also mean more people may experience periods of declining health, cognitive changes, and dependency. Families who don’t plan ahead for these possibilities may find themselves making reactive versus proactive decisions for themselves and loved ones. Decisions lacking foresight can not only be more costly but are more likely to create family conflict. Advance care planning, on the other hand, may support greater clarity, control, and confidence in the decision-making process. Start with the Conversation Most Families Avoid Contrary to what many people may think, thoughtful planning begins with a conversation—not documents or strategies. And while it can feel uncomfortable to discuss things like declining health, financial dependency, and end-of-life preferences, avoiding difficult conversations doesn’t prevent these situations from happening. It just means you’ll be less prepared when they do. Also, don’t assume that loved ones who may be reluctant to talk about these topics, haven’t spent time thinking about them. In a recent survey, 75% of retirees expressed serious concerns about declining health and potential long-term care needs as they age. Among them, 41% cited “declining health that requires long-term care” as one of their greatest retirement fears. In addition, 36% fear losing their independence and 32% are concerned about cognitive decline and dementia. 1 For older adults who may be reluctant to initiate or engage in discussions about aging, consider adopting a curious and respectful approach that focuses on more positive or neutral aspects of aging. Questions like those below may lead to deeper discussions about aging and independence: What do you enjoy most/least about this stage of your life? What do you find easier/harder about growing older? What aspects of aging have surprised you the most? What do you worry about the most as you get older? Who do you want to make healthcare decisions on your behalf if you’re unable to do so yourself? What type of living arrangement would make you feel happy and secure if you were no longer able to live independently? What are some specific ways I can help you retain your independence for as long as possible? Are there things that you no longer want to do, or don’t feel up to doing, where I can lend a hand? These conversations aren’t about taking control away—they’re about honoring your loved ones’ wishes before someone else has to guess them. The Financial Reality Most Families Underestimate Long-term care can be an often-overlooked financial consideration in retirement planning. Whether it’s in-home care, assisted living, or a nursing facility, the costs can be substantial—and services are often needed longer than expected. The annual Cost of Care Survey released in March 2026 lists the national median costs for long-term care services and supports in the United States as follows: 2 Non-Medical Caregiver: $80,080 annually (44 hours/week) Skilled Nursing in Home: $90 per hour, with a median per-visit rate of $160 Assisted Living Communities: $74,400 annually Nursing Home: $315 per day, or $114,975 annually for a semi-private room; $355 per day, or $129,575 annually for a private room Key questions to address about long-term care planning, include: Do your parents have a plan to pay for care not covered by Medicare? Are assets structured efficiently in the event care is needed? Do they have long-term care insurance or another funding strategy in place? Many people don’t realize that Medicare does not cover long-term care expenses, such as assisted living facilities, in-home aides, or nursing home costs. Without advance planning, families may face pressure to use assets quickly or make rushed decisions that may limit available options. At Return on Life Wealth Partners, we seek to align financial strategies with individual values, needs, and preferences, not just theoretical projections. Important Legal Documents to Consider Having the right documents in place can also help reduce stress and anxiety on everyone’s part at a time of crisis or when faced with a medical emergency. Below are several foundational documents that should be part of every family’s estate plan: Durable Power of Attorney (POA) – designates a trusted person (agent) to manage your financial or medical affairs; remains effective even if you become mentally or physically incapacitated Healthcare Power of Attorney – focuses strictly on medical care and not financial matters Living Will / Advance Directive –specifies your preferences for medical care, particularly end-of-life treatment, if you become unable to communicate These documents, which are executed by a legal professional, ensure that if your parents are unable to make decisions, someone they trust can step in without court involvement or delays. Without appropriate legal documents, families can face complications and delays at a time when they need to make clear and timely decisions. Organization Matters One of the most practical and often overlooked steps in preparing for what lies ahead is simply organizing information. Make sure someone in a position of trust knows: Where your loved one’s accounts are held Where important personal, legal, and estate planning documents are kept How to access insurance policies and coverage details What their monthly obligations and recurring expenses are and how they’re managed How to contact their trusted financial, legal, and accounting advisors Think of this as creating a “financial and life roadmap” for your parents. It doesn’t just make things easier—it can help avoid costly mistakes and unnecessary stress. Watch for the Early Warning Signs Planning shouldn’t wait until there’s a crisis. Often, there are subtle indicators that it’s time to step in: Missed bill payments and/or appointments Memory lapses that impact daily life Declining physical mobility Increased reliance on others Decreased interest in social activities and engagements These signals don’t mean independence is gone—but may mean it’s time to begin planning discussions. The Emotional Side No One Talks About This process isn’t just logistical. It’s deeply emotional. Roles begin to shift. The people who raised you may now rely on you more and more. That can result in all parties experiencing different degrees of guilt, stress, uncertainty, and family tension. When there’s a plan in place, families can spend less time worrying about decisions and more time focusing on what actually matters: being present with each other. Bringing It All Together Planning for aging parents isn’t about expecting the worst, it’s about being ready for reality. Navigating this new stage of life with confidence begins with: Starting conversations early Aligning financial and care strategies Putting legal protections in place Being proactive instead of reactive If helping parents put a plan in place for the future is something your family has yet to address, remember, the conversation doesn’t have to be perfect, it just has to start. If you’re unsure how to begin, give us a call. At Return on Life Wealth Partners, we help families navigate change with strategies that seek to support what brings the most meaning to their lives. 1 Retirement Realities: The Experience of Retirees 25th Annual Transamerica Retirement Survey, December 2025; Transamericainstitute.org. 2 CareScout 2025 Cost of Care Survey, March 2026; Genworth.com. Important Disclosures This material is provided for informational and educational purposes only and does not constitute investment advice, legal advice, or tax advice. The information contained herein is general in nature and may not be applicable to all individuals or situations. Tax laws and regulations are subject to change, and their application may vary based on individual circumstances. Individuals should consult with qualified tax, legal, or financial professionals regarding their specific situation before making any financial decisions. Investing involves risk, including the potential loss of principal. No strategy can assure success or protect against loss. Past performance is not indicative of future results. Return on Life Wealth Partners does not provide legal or tax advice. Any discussion of tax strategies is not intended to be used, and cannot be used, for the purpose of avoiding tax penalties. Investment advisory services offered through Planned Financial Services, LLC, dba Return on Life ® Wealth Partners, an SEC-registered investment adviser.