What our new estate planning guide reveals about state-level taxes most people overlook

Key Takeaways Which states have estate or inheritance taxes in 2026? Currently, 17 states plus Washington, D.C. have either a state estate tax or inheritance tax, with exemptions as low as $1 million. How much could my heirs owe in state estate taxes? It depends on where you live and the size of your estate. In Oregon, for example, an estate of $3 million could result in over $200,000 in state estate taxes alone. What can I do to reduce my state estate tax exposure? We use strategies like annual gifting, direct tuition payments, and Roth conversions to help reduce your taxable estate over time.

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When you die, where do you want your money to go?

Most people’s answers fall into the “family” or “charities” buckets.

I’ve never had someone answer “taxes.” And it makes sense; nobody dreams of leaving a big chunk of their life’s work to the IRS.

But without proper estate planning, the gap between your ideal outcome and your actual outcome can be enormous.

One of my clients in Illinois nearly learned this the hard way. He had worked hard to save up a nice nest egg for his children, but when we sat down and mapped out what would happen to his estate if something happened tomorrow, we discovered his kids would owe the state of Illinois over $1 million in estate taxes.

The good news is that we caught the problem early, and we could fix it.

Moments like that are exactly why I wrote our new eBook, Estate, Tax, and Gifting Strategies. It’s a practical guide to understanding how estate taxes work, why they matter, and what you can do to keep more of your wealth where you actually want it.

Here’s a quick look inside.

Two Levels of Estate Tax (and Why That Matters)

Most people know about the federal estate tax. In 2026, the lifetime exemption is $15 million per person, which means a married couple can pass up to $30 million to their heirs without triggering federal estate tax. For a lot of families, that feels like plenty of breathing room.

But federal isn’t the whole story.

Seventeen states (plus Washington, D.C.) have their own estate or inheritance taxes, and the exemptions are often much, much lower. This is the part that catches people off guard:

You can be comfortably under the federal threshold and still owe your state a significant amount.

One more wrinkle: estate taxes are levied against the estate before heirs receive the money, while inheritance taxes are levied against the people who inherit. And one lucky state—Maryland—has both (so maybe cross that one off your retirement list).

When we think about where you will eventually retire and which state’s taxes you’ll likely encounter, this is a big part of the decision-making process, particularly because your state of choice can affect not just you, but your children and grandchildren as well.

Related: Retirement Planning for High Achievers

What If I Just Move States?

Remember the client I mentioned earlier who learned his kids would have to write a million-dollar-plus check for the state of Illinois if he were to pass away? His immediate reaction was that he and his wife would move permanently to their home in Palm Springs, California, to avoid the state estate tax.

They already owned a property in Palm Springs, and it felt like an easy fix for an expensive problem.

But here’s the catch: he had an IRA worth over $3 million. While California doesn’t have a state estate tax, it does assess income tax on IRA withdrawals. At an average state income tax rate of around 10%, that’s potentially $300,000 of additional income tax to pay while he’s still alive, should he live long enough to take the money out and enjoy it (which was the whole point of saving it in the first place).

I’m telling you this because these decisions involve more than one variable. That’s why it’s so important to work with a financial planner who collaborates with your estate planning attorney and tax advisor. This team can help you understand all of the moving pieces and make decisions that actually fit your full picture.

The States with the Lowest Exemptions

If you live in certain states, the estate tax conversation becomes a lot more urgent. Here are a few that stand out:

• Oregon has the lowest exemption in the country at just $1 million. If you die in Oregon with a $3 million estate, your heirs could face over $200,000 in state estate taxes. And $3 million isn’t as rare as it sounds; a home, retirement savings, and a life insurance policy can get you there pretty quickly.
• Washington comes in at $2.19 million, which is still well below what most people expect when they hear “estate tax exemption.”
• Minnesota sets the bar at $3 million. High enough to miss some families, low enough to catch plenty of others.
• Illinois has a $4 million exemption. That’s where my client was, and even at that level, the tax bill was significant.

A Plan Is Only Good If You Can Execute It

Here’s the thing about estate planning: it’s not a solo sport. The strategies that actually work require coordination between your financial planner, your CPA, and your estate attorney:

• Gifting strategies need to align with your tax picture.
• Trust structures need to reflect your family dynamics.
• Insurance policies need to be owned correctly, or they end up right back in your taxable estate.

At TNLPG, we work collaboratively with your other professionals to build a plan that’s custom fit to you, your family, and your goals. We’re here to quarterback the process and help make sure nothing falls through the cracks, so you can actually execute the plan we build together.

Related: Click here to read “Family Values and Traditions: How Wealthy Families Turn Generosity into Legacy”

State Taxes Are One Piece of a Bigger Picture

Estate taxes, gifting strategies, lifetime exemptions, state vs. federal rules; it’s a lot to keep track of, and can easily feel overwhelming.

That’s exactly why we’re here. Our job is to help coordinate your taxes both in the present day and with an eye on the future, leveraging gifting strategies and providing financial guidance designed to help minimize what you and your loved ones will owe Uncle Sam.

We created Estate, Tax, and Gifting Strategies to give you a clear, straightforward resource you can actually use. It covers the fundamentals of estate planning, walks through the major strategies for reducing your tax exposure, and helps you understand what questions to ask as you start thinking about your own situation.

Click here to request your free copy of the eBook. We’ll send it straight to your inbox, free of charge.

And if you’re ready to talk through how any of this applies to your specific situation, we’d love to help. Schedule a complimentary SWOT Session and let’s take a look at your current estate plan, where you want to go, and what it’ll take to get there.

 

How we partner with you to build a system that works with your cash flow, not against it

Key Takeaways

• Why does irregular income feel so stressful? When your income arrives in unpredictable chunks, traditional budgeting frameworks fall apart, and the psychological weight of uncertainty compounds the problem.
• What’s one of the biggest mistakes business owners make with irregular cash flow? Spending during flush periods without setting aside money for taxes or lean months. Quarterly estimates catch many entrepreneurs off guard, and tax debt becomes a real risk.
• How can we create stability when income isn’t stable? By separating the income arrival pattern from the spending pattern. Fixed monthly transfers, dedicated tax accounts, and treating banner years as multi-year savings opportunities can smooth out the feast-or-famine cycle.

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A couple came to us a few years ago caught in a cycle they couldn’t seem to break. They earned a solid household income, but the timing was unpredictable. Large deposits arrived quarterly, with gaps that often stretched longer than expected:

• For a few weeks after each deposit, everything felt manageable.
• By month two, they were stretching.
• By month three, they were anxious, watching the calendar, and waiting for the next deposit to arrive so they could breathe again.

They called it “feast or famine.” We’ve heard some version of that phrase dozens of times from clients in similar situations: physicians with meaningful amounts of compensation paid quarterly , business owners with unpredictable revenue, and entrepreneurs who earn the bulk of their income in a single season. These are successful people with good incomes, so why is their cash flow causing so much anxiety?

The stress they describe almost always traces back to the same root: a system designed for steady paychecks trying to accommodate income that doesn’t arrive that way.

The Psychology of Irregular Income: Two Belief Patterns That Shape Irregular Cash Flow Planning

One of the first things we explorewhen a client has variable income is how they think about their money when it arrives. Over time, we’ve noticed most people land in one of two camps.

1. The “this might be my last paycheck” mindset

Every deposit gets treated like it could be the final one, money goes straight into savings before anything else, and cash reserves stay high. Budgeting happens with the intensity of someone preparing for a financial apocalypse that may or may not ever arrive.

The upside? Real discipline means real results.

The downside? It’s hard to enjoy what you’ve built when some part of you is always bracing for disaster. We’ve worked with clients who have more than enoughin reserves and still feel a knot in their stomach every time they spend on something that isn’t strictly necessary.

2. The “I’ll get paid again tomorrow” mindset

When money flows in, it feels like proof that money will keep flowing in. There’s less urgency to set aside funds for taxes and less attention to building reserves. The lean months feel far away because, well, they haven’t shown up yet.

The upside? Optimism and a bias toward growth. The downside? April 15th has a way of arriving whether you’ve prepared for it or not.

Neither of these mindsets is wrong, exactly. Both contain a kernel of truth. Your career or business has real momentum, and there’s no reason to live like the sky is falling. At the same time, the structure of your income does require some intention around how you manage it. What we work on together is finding the middle ground, so you have the confidence to enjoy your success and the systems to protect yourself from the volatility into how you’re paid.

That includes recognizing what a big year actually represents. One client earned over $1 million one year (something we didn’t expect to repeat). We carved out funds for a future home and set aside reserves for down years, then invested the remainder so the banner year supported long-term flexibility instead of short-term lifestyle creep.

A banner year is a unique chance to capture several years’ worth of savings in a compressed window. Miss that window, and it doesn’t always come back.

The Tax Trap

This is where the “I’ll get paid tomorrow” mindset gets dangerous. $20,000 of revenue  lands in your account. It feels like $20,000. But depending on your bracket, $5,000 or more of that belongs to the IRS. Spend it like it’s all yours, and you’re borrowing against a bill that’s coming whether you’re ready or not.

When you’re a W-2 employee, taxes get withheld automatically. You never see that money, so you typically don’t miss it. But when you’re a business owner with irregular income, taxes are your responsibility to calculate and pay quarterly—nobody’s setting anything aside for you.

The fix is simple: the moment a deposit arrives, move a set percentage into a separate account for taxes. Treating your tax obligation as “paid” from the start is what keeps April from becoming a crisis.

Related: Are You Tax Loss Harvesting or Tax Gain Hoarding?

Why Discipline Alone Isn’t Enough

We talk about “discipline” a lot in these conversations, and it can start to sound like the answer is just try harder.

Here’s the thing: willpower is a limited resource, and it tends to run out at inconvenient times.

When a large deposit hits your account, the pull to spend is real. You earned that money, and you worked hard for it. And the voice that says “you’ll get paid again soon” is convincing precisely because it’s usually true.

This is where we come in. The clients we work with who navigate irregular income most successfully have worked with us to build systems that make the right behavior automatic. The decision gets made once, in advance, and then the system runs whether you’re feeling disciplined or not.

Three Systems Designed to Make Discipline Automatic

1. Smoothing the Quarterly Bonus Cycle

For the couple that received a significant amount of income in quarterly installments, we knew the solution required a shift in how they thought about bonus money. Instead of treating each quarterly payment as immediately available, they began depositing it into a separate savings account. Over the following three months, the client  then transferred one-third of the bonus into their checking account to supplement their regular paychecks.

The total income didn’t change; what changed was the timing of when they accessed it. By smoothing their cash flow, we eliminated the feast-or-famine cycle that had made budgeting feel impossible.

2. Using the Fixed-Transfer Method for Business Owners

One of our longtime clients had a business with unpredictable revenue. Some months were strong, others lean, and there was no consistent pattern. He knew he needed to move money from the business to cover personal expenses, but he had no system for how much or when.

So he’d wing it, with big transfers when things looked good, and nothing when they didn’t. His family’s sense of financial stability rose and fell with the cashflow of the business.

We changed two things:

• First, we established a buffer on the personal side of about three months of spending, funded by a one-time transfer from the business. That became the safety net.
• Then, we set up a fixed monthly transfer with the same amount, every month, regardless of how the business performed.

Some months the business account grew; other months it held steady. But the family’s day-to-day money experience stopped riding the roller coaster. The idea was that the business could swing, but their life didn’t have to.

Related: The Business Owner’s Paradox

3. Embracing the Seasonal Harvest

We work with many business owners who share a similar pattern where 75% of their income arrives between June and August. The rest of the year covers the basics, but anything beyond that has to wait for summer.

So we meet in late summer, right when they’re flush. That’s when we map it all out together:

• 401(k) contributions
• Roth IRA funding
• Any other investments
• The rainy-day reserve that will carry them through the slower months

The money is actually in hand, which means we can make real decisions instead of hopeful ones. If we wait until January to have this conversation, the cash is usually gone. By planning when the harvest is in, we make sure it gets allocated before it disappears into everyday life.

Let’s Build a System That Works for You

We’ve seen firsthand that when the cash-flow mechanics are working and the systems run without requiring constant attention, the anxiety starts to lift.

You have reserves and a methodology, and you know that the variability in your income doesn’t have to translate into variability in your financial security. Instead of asking how to survive the next lean month, you can ask what you actually want to build over the next decade.

We’ve helped clients move from constant vigilance to genuine flexibility. The income stays lumpy—the difference is we’ve built a structure designed to absorb the volatility, freeing them to focus on bigger questions.

If any of this resonates or raised new questions about your cash flow strategy, we’re always happy to talk it through. Sometimes simply having a conversation about what’s possible is what’s most valuable.

Curious whether your current approach is serving you well? Reach out to start a conversation about your cash flow and what a more intentional system might look like.

Schedule a complimentary SWOT Session.  

The moment an AI assistant emails you, the future stops feeling theoretical.

Key Takeaways 

• What does AI actually mean for my financial plan right now? For some clients, AI is reshaping their businesses and careers in real time. For others, it’s mostly background noise that hasn’t hit yet. Either way, it’s influencing markets, and we’re paying attention. 

• How should I respond if AI is making me uneasy or making me feel like I need to act fast? That pressure is real, whether it shows up as excitement, concern, or both. The better response is usually not to react out of urgency, but to bring the question into your planning process and evaluate what, if anything, actually needs to change. 

• Is doing nothing a valid response when AI feels like such a major shift Sometimes it is. Holding steady is not the same as ignoring change. In many cases, it reflects a disciplined decision to stay aligned with a plan that was built to absorb uncertainty. 

 

 A client’s AI assistant emailed me last week. 

It had a name, it was polite, and it was organized enough that if you had shown me the message two years ago, I probably would have assumed a human wrote it. Instead, I found myself wondering what the etiquette is for replying to someone else’s robot.  

Do I greet the assistant? Do I respond to the client? Are we already at the point where our tools are supposed to talk to each other while we supervise from the sidelines? 

I spend a lot of time talking about what’s around the corner for the clients and business owners I work with, and lately, AI has found its way into more of those conversations. Here’s what I’m hearing (and what it might mean for you). 

AI Is Already Here, But Not Everyone Is Feeling It the Same Way 

The term “AI” has become so broad that it can mean almost anything. It can refer to the note taker in your Zoom meeting, the search tool summarizing results before you click, or the systems now writing code and building applications from a few plain English prompts. 

Those are all very different things. Grouping them together is part of why so many conversations about AI feel vague or circular. So, when we think about AI for our clients, we focus the lens through a simple, powerful question:  

How is AI changing the decisions you are facing in your life, career, and finances? 

Right now, I tend to see two very different reactions. 

Two Clients, Two Very Different Conversations 

While some pieces of AI-powered technology have taken hold in everyday life (we’ve used an AI note-taker at TNLPG for about a year, and it already feels like it’s always been there), the impact of generative AI is less clear.  

Generative AI is writing production-level code, designing systems, and performing tasks that, up until recently, required highly specialized humans. This is the space creating both real opportunity and real displacement across many categories. 

But that “next level” technology is hitting industries at different speeds, and the uneven pace is exactly what makes these conversations so different from one client to the next. Two people can sit across from me in the same week, both wanting to talk about AI, and the conversation will go in completely opposite directions. 

For some, AI looks like a gold rush 

I have one client who sold his business and has now thrown himself into the AI space. He is teaching himself how to build apps and systems using what people call “vibe coding,” essentially describing what he wants in natural language and using AI to help construct it. He told me recently that if you really want to keep up with where this technology is going, you almost need to be unemployed, because it’s moving that fast. 

For him, AI feels like a new frontier of entrepreneurship. It feels like the early internet, or a gold rush, where people who move early may find real opportunity. He’s looking at it and thinking, “How do I build something in the middle of this?” 

For others, it looks like disruption 

I have another client who works as a software engineer. He uses AI in his work regularly and is seeing how that growth could potentially displace his career. And while he used to tell young people that programming was one of the safest possible career paths, he doesn’t say that anymore. 

He was thinking through it the way an engineer would (logically, carefully, analytically). His focus was more on preparedness and contingency planning. If you work in software, cybersecurity, data infrastructure, or anything adjacent to the tech supply chain, the ground is shifting under your feet right now, and that instinct to “retreat” makes sense. 

The Real Risk Isn’t AI—It’s How You React to It. 

On the surface, those seem like very different stories. In practice, they often lead to the same planning question: 

What should I do now, financially, in response to what AI might change next? 

This is the part I care about most, because it’s where AI and financial planning intersect with something I see in almost every client relationship: the pull to do something when the world feels uncertain. 

When a wave of anxiety hits, whether it’s about AI or tariffs or an election or a pandemic, I watch some form of those two responses play out over and over again. 

1. The first is the FOMO response. I need to chase this opportunity before I miss it.  
2. The second is the flight response. I need to protect what I have and wait for things to settle down. 

What we practice at TNLPG is a third approach: staying focused on what matters most. 

Your portfolio was designed around your goals, your timeline, and your life. Market-moving news, no matter how dramatic, doesn’t change those fundamentals overnight. 

I think of it like farming. The work of tending, monitoring, adjusting, protecting; that happens constantly, whether or not it’s harvest season. You don’t always see it, but the reason we can confidently say “your portfolio continues to support your plans for the future” is because of the thousands of conversations, hundreds of households, and years of disciplined planning that got us here.  

Is AI On Your Mind? 

The conversation about AI isn’t going to slow down. If anything, it’s going to get louder, faster, and more complicated as new tools will emerge and industries shift. Some careers will likely look very different a few years from now. 

And through all of it, we’re paying attention with the kind of steady, intentional focus that we bring to everything we do for our clients. Whether you’re building something new, watching your industry evolve, or just trying to make sense of the noise, these are exactly the kinds of conversations we’re here for. 

If something in this article resonated, or if you’ve been sitting with a question you haven’t voiced yet, we’d love to hear it. Reach out to your advisor to start a conversation about how these shifts might intersect with your plan. 

Not working with TNLPG yet? Schedule a complimentary SWOT Session to learn more about how we help turn moments of uncertainty into moments of clarity.  

What people normally mean when they talk about “passive income” (and why the phrase often creates more confusion than clarity).

Key Takeaways · What is passive income? Passive income broadly refers to money that flows in from sources other than direct labor (dividends, rental income, interest, business distributions). · Why is replacing your full gross salary in retirement often the wrong target? Most people anchor to their gross salary when estimating retirement income needs. But that number includes taxes, retirement contributions, and payroll deductions that won’t apply in the same way once work income stops. · What does a more precise, tax-aware retirement income strategy actually look like? Rather than chasing a single “passive income” number, a thoughtful retirement income strategy evaluates how much income your portfolio can generate organically, where strategic withdrawals make sense, and how to structure distributions in a way that supports both lifestyle needs and long-term sustainability.

“Passive income” is one of the most commonly used phrases in personal finance—and one of the least consistently defined.

• Everybody wants it
• Almost nobody defines it the same way

At some point, your active income ends, typically when you retire. What funds your life after that moment is one of the most consequential financial questions you’ll ever answer.

In a single week, we might talk with clients about dividend stocks, rental properties, private lending funds, and yes, whether buying a laundromat is actually a good idea (it comes up more than you’d think). Technically, all of those qualify as “passive income.” But practically, they are completely different conversations with completely different tradeoffs.

Somewhere in the gap between the appeal of the idea and the usefulness of the term is where a lot of retirement planning goes sideways.

The Problem: “Passive Income” Is Poorly Defined

Passive income is money that flows from assets you own rather than hours you work.

At its broadest definition, it simply means money that reaches your bank account for reasons other than showing up to work:

• Dividends
• Interest
• Rental income
• Business distributions
• Even Social Security or structured withdrawals from savings technically qualify

But that broad definition is also the problem. When a single phrase is used to describe everything from dividend-paying stocks to rental properties to side businesses, it stops being a planning term and becomes a catch-all label.

Why Does it Matter?

Many high earners are exceptional at generating income but have never had to engineer it without their effort. When executives and business owners earning high six or seven figures bring up passive income, they’re usually trying to solve for two underlying fears:

• Will I have enough to replace my current lifestyle once I stop working?
• Can my portfolio reliably generate what I need without running out in retirement?

Those are valid questions. But when the phrase “passive income” isn’t clearly defined, people often default to two retirement planning modes of thought that don’t hold up under scrutiny.

Related: Retirement Planning for High Achievers

Misconception #1: I Need to Replace My Entire Salary With Passive Income to Retire

Here’s where the passive income conversation gets complicated for high earners.

When executives and business owners start thinking about replacing their active income in retirement, the first instinct is usually to anchor to the number they know best: their salary. But that anchor is almost always wrong, and it quietly shapes everything that follows.

“I earn $300,000 a year now. To maintain my lifestyle in retirement, I’ll need $300,000 a year then.”

On its face, it seems airtight, but in practice, it leads people to believe they can’t retire until they’ve accumulated a much larger number than they actually need.

Most people define their “income” as their gross salary. But after taxes, 401(k) contributions, health insurance, and other withholdings, a $300,000 salary might deliver closer to $180,000 in actual take-home pay. That’s the number that funds your life.

In retirement, that number often shifts further:

• You’re no longer contributing to retirement accounts
• Social Security and Medicare taxes, which only apply to earned income, are no longer withheld
• The income sources that make up a typical retirement portfolio (Roth distributions, dividends, capital gains, traditional IRA withdrawals) each carry their own tax treatment, often more favorable than wages
• If you’ve relocated in retirement, your state income tax picture may shift as well

For many clients, the amount of “passive income” they’ve been aiming for turns out to be significantly higher than what they truly need.

Related: Defining “Enough” and Planning for Surplus Wealth

Misconception #2: My Portfolio’s Rate of Return Will Be My Passive Income

The second place people get tripped up is in estimating how much passive income their portfolio is actually capable of generating.

“If my portfolio earns 7%, that’s my passive income for retirement.”

We understand the logic. But “rate of return” isn’t a single number, and it’s largely unpredictable. Portfolio growth is positive in good years, negative in bad ones, and no one can reliably forecast it year to year.

If a $2 million portfolio earns 7%, it doesn’t mean it generated 7% in income. It might have produced 2% in dividends and interest, with the remaining 5% coming from market appreciation.

Accessing that 5% requires selling assets, and selling during down markets can permanently erode a portfolio’s long-term capacity.

When “passive income” is defined loosely, growth and income get blurred together. The result is a projection that looks tidy on paper but behaves very differently in real life.

How Do We Actually Think About Passive Income in Your Retirement Plan?

Part of what makes “passive income” so hard to think clearly about is that it triggers real FOMO. When you’re seeing headlines about people generating income while they sleep, there’s an underlying anxiety that you might be missing out on a better use of your money.

But what those headlines never include are the tradeoffs, the complexity, or the honest comparison to what you’re already doing. The pitch is always the upside; the plan is rarely the full picture.

What actually creates clarity is doing the precise work for your unique situation: Your actual take-home, your portfolio’s income-generating capacity, and your tax picture across income types and sources. It should all tie back to your timeline, your goals, and your life.

A Cohesive Approach to Passive Income Planning

Many advisors focus primarily on portfolio performance. Retirement income planning requires integrating performance, tax treatment, and withdrawal sequencing into a cohesive structure.

For some clients, we design portfolios where a meaningful portion of passive income needs are met through cash-generating investments. For others, a blend of income and strategic, tax-aware withdrawals makes more sense. What’s right depends entirely on your timeline, your tax picture, and what “enough” actually looks like for your life.

That’s not the work the internet sells, and it’s not always the work traditional investment management focuses on, but it’s the work that actually determines whether retirement income holds up over time.

The Right Framework Changes Everything

Retirement income planning isn’t about chasing the right buzzword or hitting an arbitrary number. It’s about understanding what your money is actually doing, including how much it generates on its own, what you’ll genuinely need to live well, and how to build a strategy that connects the two with precision.

That’s the difference between a plan that looks right on paper and one that holds up when you’re actually living it. If there’s a passive income or retirement planning question on your mind, we’d love to be part of that conversation—reach out anytime.

And if you’re not yet working with our team, a complimentary SWOT Session is the right place to start. We’ll look at what’s working in your financial picture, where the gaps are, and how to align your strategy with where you actually want to go, including what your retirement income could realistically look like.

Schedule a complimentary SWOT Session.

You’ve built a business worth millions. When do you walk away?

 

Key Takeaways ·       When should I start planning my business exit? Ideally, five years before you want to exit, though it’s never really “too early” to start planning ahead. ·       What’s one of the biggest obstacles to selling a business? Often, it’s not the money; it’s the emotional attachment to your business and uncertainty about what comes next. ·       Can I exit my business without selling everything? Yes! In some cases, partial ownership can provide ongoing income while removing you from daily operations.

 Two clients. Two business sales. Same strong financial outcome.

But while one called us ecstatic about her next chapter, the other mourned the loss of his identity.

What made the difference wasn’t the money—it was something most exit plans completely miss.

We’d worked with the first client for six years, calculating minimums, mapping out what she’d live on versus what she’d leave to her kids and charity, and planning tax strategies to protect the proceeds. With travel plans mapped out for the next eighteen months and three houses to manage and renovate, she viewed her business sale as permission to start the life we’d been designing for years.

By the time the sale closed last summer, every financial question had an answer. “I’m ecstatic,” she told us.

The second client is closing this month. His financial outcome is even better than projected, but that doesn’t change the fact that he’s dismantling something that’s been central to his identity for thirty years.

‘This is it. This is the end,’ he said.

We’ve been meeting with him more frequently in recent months, not to review spreadsheets, but to help him process what this transition means while also recognizing what he’s gaining: time with grandkids, freedom from people management, and freedom from the pressure he’s carried for decades.

There’s no “right” emotion when exiting a business. What matters is understanding that readiness has several dimensions, and they rarely move in perfect sync.

Related: Your 2026 Business Goals Are Set. Here’s How to Make Sure They’re Working for You

Exit Readiness Has Two Dimensions (and They Don’t Always Move Together)

When people talk about exit planning or succession planning for business owners, the conversation usually starts and ends with money. But in our experience, readiness isn’t one-dimensional.

We think about exit planning across two variables:

• Financial readiness: whether the numbers actually support a transition
• Emotional readiness: whether you’re personally prepared to let go, shift roles, or redefine purpose

What surprises many business owners is how often these two dimensions are misaligned.

Financial Readiness: The Questions the Numbers Can (and Can’t) Answer

Financial readiness is where most exit conversations begin and where misconceptions often show up.

What Net Proceeds Really Mean

On paper, a potential sale can look straightforward, but the net proceeds—what actually lands in your account after fees, taxes, and deal structure are accounted for—can look very different from the headline number.

Many business owners are surprised by how much of the gross value never makes it to their personal balance sheet. The difference between what a business sells for and what ultimately supports your lifestyle can be significant.

We’ve seen business owners expect to walk away with $5 million based on a valuation, only to net around $3 million after transaction fees, legal costs, broker commissions, and federal and state capital gains taxes. In some states, between federal long-term capital gains (20%), net investment income tax (3.8%), and state taxes (which can run 5-13% depending on where you live), nearly 40% of your gross proceeds can disappear before the money reaches you.

Structuring What Comes Next: Live-On vs. Leave-On

Once you understand the net proceeds, the next question is how to structure them. We help you think about this in two buckets:

• Your live-on bucket: The assets that will generate income and support your lifestyle for the rest of your life. This isn’t just your retirement spending; it’s healthcare, travel, unexpected expenses, and the flexibility to live the way you want without worrying about running out of money.
• Your leave-on bucket: The assets you’re intentionally preserving for kids, charity, or future generations. This is wealth you don’t need to touch, positioned to grow and transfer efficiently when the time comes.

The distinction matters because mixing these buckets is one of the biggest mistakes we see post-sale. When you don’t clearly separate what you need from what you’re preserving for others, you end up either:

• Living too conservatively, afraid to spend money you’ll never actually need, or
• Spending freely without realizing you’re eroding what was meant for your kids or charity

Each bucket has completely different investment strategies, tax considerations, and planning requirements. Your live-on assets might be invested more conservatively because you need reliable income. Your leave-on assets can take more risk because they have a longer time horizon. Without this framework, you’re making decisions in the dark.

The Impact of Proactive Tax Planning

Once the sale agreement is signed, your options narrow dramatically. We’ve had business owners come to us three weeks before closing asking about tax mitigation, but the strategies that could have saved them $200-300K in taxes are no longer available because the timing window closed.

This is why at TNLPG, we don’t wait for our clients to bring up exit planning. If you own a business, we’re having this conversation from day one—not because we think you should sell tomorrow, but because when the right opportunity emerges (or when you’re simply ready), we want every possible strategy available to you.

One of the most powerful moves we help clients make is gifting shares of their business to a donor-advised fund before the sale occurs. By doing this, you’re avoiding capital gains taxes on that portion of the sale.

Related: How Donor-Advised Funds Can Help High Achievers Build Lasting Charitable Impact

Beyond charitable giving, your business structure also shapes your tax exposure. For example, C-Corporations pay taxes at the business level before proceeds reach you personally, while S-Corporations flow income directly through to you. This changes when and how taxes are due and can have rippling effects on your other tax strategies.

State-Level Implications

Did you know that where you live when you sell matters almost as much as how much you sell for?

Some states tax income heavily but have no estate tax. Others reverse that trade-off. States without income tax often generate revenue elsewhere through property or transfer taxes.

Many owners assume that moving to a no–income-tax state automatically lowers their overall tax burden. But that’s not always true. California, for instance, doesn’t have a state estate tax, but it does tax IRA withdrawals. Illinois flips that trade-off, with an estate tax but no tax on retirement account withdrawals. States like Florida or Texas eliminate income tax altogether, but often make up for it through property or transfer taxes.

Every location has trade-offs. The question isn’t which is best in theory; it’s which aligns with how you want to live and how your wealth is structured.

Emotional Readiness: Taking Math Out of the Equation

Even when the numbers say you could step away, that doesn’t mean you feel ready to do it.

An Identity Shift

We’ve worked with business owners who were financially ready for years, but couldn’t picture what a Tuesday morning would look like without meetings, decisions, or people relying on them.

Some people worry about being bored. Others worry about losing relevance or the mental stimulation that’s been part of their daily life for decades. And many simply haven’t had the time or the mental space to imagine what a different rhythm could look like.

On top of that, many business owners are still deeply embedded in day-to-day operations. You’re the rainmaker, the decision-maker, the culture carrier. Until that role can be redefined or delegated, most exit options remain theoretical.

We help you separate what the numbers allow from what you actually want, and understand how those two intersect. Remember our client who sold last summer? Part of her clarity came from having already envisioned what came next: the homes, the travel, the rhythm she was excited about.

The client closing this month is working through a different reality: he’s staying on for three years to help transition the new owners, which gives him time to gradually redefine his role rather than cutting ties all at once.

Life Events That Trigger Readiness

Emotional readiness doesn’t always arrive on a timeline.

Sometimes it’s the birth of a grandchild. You don’t realize how much you want to be present until there’s a small voice calling you from the sidelines or a game you don’t want to miss. The business that once felt like your greatest achievement now feels like what’s standing between you and what matters most.

Other times, it’s a health scare. Those moments have a way of sharpening priorities. Life feels shorter. The grind feels heavier. And the question shifts from “How much longer can I do this?” to “How do I want to spend the time I have?”

We see these moments often, and we know how disorienting they can feel. At TNLPG, we help you create space to talk through how life events are reshaping priorities, and how those shifts should—or shouldn’t—influence financial decisions.

What Comes Next for You?

The business owners who navigate exits most successfully aren’t necessarily the ones who planned the longest; they’re the ones who started the conversation early enough to have real options when the moment arrived. Building emotional readiness can’t be rushed when a buyer appears, and exploring what retirement actually looks like for you takes honest reflection, not hasty decisions made under pressure.

The ultimate goal is to create clarity around what you’ve built, what matters most to you now, and how you want the next chapter to feel.

If reading this has surfaced new questions—or simply helped you put words to thoughts you’ve been carrying—you don’t have to sort through them on your own. Often, the most helpful next step is a conversation that brings perspective and calm to what can feel complex.

And if you’re not yet working with our team but want to better understand how succession planning fits into your overall financial picture, we invite you to connect with our team. We’d be glad to learn more about your situation and share how we work with business owners and executives facing similar decisions.

Schedule a complimentary SWOT Session.

Why successful couples fight over small money decisions—and real advice on how to bridge the gap

Key Takeaways:

·       What are money scripts? The unconscious beliefs about money we develop from childhood experiences and that shape our financial behaviors today.

·       Why do successful couples struggle with making money decisions together? It’s rarely about the actual dollars; it’s about the underlying fears, values, and origin stories each partner brings to the relationship.

·       How can high-achieving couples make financial decisions together? By exploring where your money beliefs came from, challenging whether they still serve you, and appreciating what each partner brings to the table.

 

The tension in the room was impossible to miss.

Sitting across from us was a couple who had, by any measure, built something remarkable. They were both at the top of their respective fields, had two sons they were incredibly proud of, and a home in a neighborhood most people dream about. Their investment accounts held balances that should have eliminated any money worries years ago.

And yet, they were in genuine conflict over something that seemed, on the surface, small: valet parking.

Not whether they could afford it (they obviously could), or whether it was the “right” financial decision in some objective sense. The issue was that every time they went out to dinner, this same fifty-dollar decision surfaced tension. And every time, it left them both frustrated, defensive, and a little more distant from each other.

Sitting in our office, they were miles apart over a decision that most people wouldn’t think twice about.

If you’ve ever felt this kind of disconnect with your spouse around money, you probably recognize that familiar cocktail of frustration and confusion: We agree on everything else. Why is talking about money so hard?

After years of working with successful couples on their finances, we’ve learned that in most cases, the conflict has almost nothing to do with the money itself.

Related: Click here to read “Family Values and Traditions: How Wealthy Families Turn Generosity into Legacy”

Competitive Spirits in Partnership: When the Drive That Built Your Success Works Against Your Partnership

Most couples struggle to align around money. But when both partners are high achievers who’ve each played a meaningful role in building wealth, the stakes—and the tension—get higher.

Money isn’t just math or logistics; it’s identity, history, fear, ambition, security, and self-worth all wrapped into one. Each of you arrives with your own relationship to money and your own definition of “enough,” shaped long before you ever began building a life together.

What makes money different from other relationship tensions is that it refuses to stay in one lane. You can’t simply agree to disagree and move on, because money quietly threads through nearly every shared decision you make, from where you live, to how you travel, what your daily life looks like, how you spend and save, how you support family, and even when you retire.

Your choices now have compound returns and cascading effects that extend far beyond the moment, which is why unresolved misalignment can feel so destabilizing.

Are Your Money Scripts Running the Show?

If money conflicts in your relationship feel confusing or disproportionate, you’re not imagining it. What you’re really running into isn’t a budgeting problem or a numbers problem. It’s a money script.

Money scripts are the unconscious stories you carry about money: what it means, how it behaves, and what it says about safety, success, or self-worth. They’re formed early, shaped by what you watched, felt, feared, or promised yourself long before you ever shared a bank account. And most of us never realize they’re there.

We bring these “scripts” into every relationship. Money, after all, is rarely neutral. It carries emotional weight from childhood, family dynamics, scarcity, pressure, or even sudden responsibility. When those beliefs go unexamined, they tend to surface sideways, especially when two people are trying to make decisions together.

Here’s a common dynamic we see all the time:

• Meet Steve Spender. Steve grew up in a lower socioeconomic household. His family struggled to make ends meet, and he watched his parents stress over every expense. His interpretation of that experience was, “I’m never going to deprive myself when I’m in charge of my finances. I’m going to work hard and enjoy everything life has to offer. I’m going to live for today.”
• Meet Susan Saver. Susan also grew up in a lower socioeconomic household and had remarkably similar experiences to Steve, but her interpretation was completely different: “I am never going to be in that position when I’m in charge of my finances. I’m going to work hard and save as much as I can so I’m always safe. I never want to face not having money again.”

Same circumstances. Two very different stories.

When Steve and Susan combine their lives without naming these scripts, conflict isn’t just possible; it’s almost guaranteed. Steve experiences Susan as anxious and overly restrictive, someone who’s missing the point of why they work so hard in the first place. Susan experiences Steve as reckless, someone who’s putting their future at risk for short-term gratification.

Both feel justified. Both believe they’re being responsible. Both try (unsuccessfully) to convince the other they’re wrong.

But the actual truth is simpler: they had different experiences growing up, and they drew different conclusions from them.

When Money Misalignment Lingers

Over time, unresolved money tension shows up in predictable ways:

• One partner goes quiet while the other takes control
• Resentment builds beneath the surface
• Collaboration starts to feel like a power struggle
• Conversations are avoided because they feel too charged

Children notice this dynamic, too. They absorb the unspoken messages around money and often carry those beliefs forward as their own money scripts. Meanwhile, financial anxiety grows, mental health suffers, and the tension rarely resolves on its own.

Related: The Hidden Cost of Financial Silence in Wealthy Families

Ironically, misalignment can even hurt the finances. Avoided conversations, stalled decisions, and reactive choices all make it harder for your wealth to work intentionally toward your family’s long-term goals.

This is where our work begins.

Welcome to Money Conversations: Couples, Finances, and the Power of Objective Advice

We don’t step in to decide who’s right or wrong. Instead, we listen for the experiences, emotions, and beliefs shaping each partner’s perspective. Many clients say it feels a bit like therapy, and that’s by design—we’re here to help you make financial decisions together with clarity and confidence.

One of the most powerful shifts happens when couples explore their money origin stories together, including:

• Early experiences with money
• Family messages and role models
• Moments of pride, fear, or regret
• The phrases that quietly run the show: “We can’t afford that,” “I don’t want to miss out,” “What if we never have enough?”

Once those stories are visible, you start to see how different approaches can actually complement each other, creating space for more balance, more appreciation, and better decisions.

Maybe Susan Saver helps Steve Spender feel more financially secure, giving him the freedom to take smart risks in his business. Maybe Steve Spender helps Susan Saver experience more joy in the present, enriching her life beyond just accumulation.

The combination of each partner acting with intention rather than reaction, and truly understanding and appreciating each other, can help you both feel more equally valued. You start working together, leaning on each other’s strengths to make more empowered financial decisions.

Back to the Valet Parking Story

Remember the couple stuck on a fifty-dollar valet decision? When we dug into what was really happening, it became clear they were valuing different things:

“I can just park around the corner,” the husband explained. “We walk five minutes. Why spend the money?”

His wife’s response came loaded with weeks of similar conversations: “Because I don’t want to walk several blocks in heels.”

Neither was what the other actually meant. After asking a few questions, we found that he was focused on teaching their sons to not be wasteful with money, while she was worried about safety after dark and in an unfamiliar neighborhood.

Whenever you find yourselves disconnected around what you’re valuing with money, the most helpful approach is to acknowledge it openly.

After talking it out, we encouraged the couple to frame it as a teaching moment to their sons:

“Tonight, we decided to valet park because feeling safe and comfortable matters to Mom, especially after dark, and we make our choices together as a team. We each think about money in our own ways, and that helps us balance each other. When you’re older and have your own money, you’ll get to decide what matters to you and the people in your life.”

This couple left that meeting with a framework they could apply to other financial disagreements. Not every decision would go exactly the way either one wanted, but they had a way to navigate those moments that preserved respect and partnership.

Your Financial Future Is Counting on the Both of You

Even the most successful couples experience friction around money. The real work is understanding why each of you thinks the way you do, appreciating what each perspective brings, and learning how to make decisions together that honor both security and enjoyment.

If you and your partner are working through a financial decision (big or small, old pattern or new challenge), we’re here to help. Sometimes an outside perspective is all it takes to find your way forward. Our partnership with you is about supporting your entire financial life, including the relationship dynamics that shape your decisions.

And if you’re not yet working with our team, now might be the right time to explore how an authentic, relationship-focused approach to financial planning can help create lasting alignment. We’d welcome the chance to connect and explore whether we’re the right fit for you. Schedule a complimentary SWOT Session.

You’ve already set your 2026 business targets. Here’s how we help you determine whether they actually serve your life.

Key Takeaways ·       What’s the difference between planning “for” vs. “from” my business? Planning for your business focuses on revenue and growth. Planning from your business asks how those results translate into your personal financial security and goals. ·       Why do business owners neglect their personal finances? The instinct to keep the business alive often takes priority over personal wealth-building, but this can become a trap if it’s the permanent standard rather than a temporary season. ·       How often should I revisit my business goals? At minimum, twice per year. Quarterly check-ins help you stay accountable and catch misalignments between business performance and personal financial needs before they become problems.

If you’re reading this in January, your 2026 business goals are likely already set. You’ve mapped out revenue targets, profitability benchmarks, and growth initiatives, and you know what you want your business to accomplish this year.

But here’s a question worth sitting with: Do you know what you need from your business this year?

Most business owners plan for their business with precision and plan from their business almost as an afterthought. They focus on what the entity needs to thrive without asking what the entity should be doing for them personally. Revenue goals get set. Personal wealth-building gets deferred.

At The Next Level Planning Group, we work alongside you in the space where your business and your life meet. Throughout the year, we work together to intentionally align the two, so your business decisions can support your personal financial security for the long term.

The Trap: When the Business Comes First (at Your Own Expense)

There’s a moment on every flight when the attendant reminds you to put on your own oxygen mask before helping others. The logic is simple: you can’t help anyone if you’re not breathing.

Business owners face a version of this choice constantly, and the instinct to usually to keep the business alive, protect employees, and avoid pain for others. But too often, that can lead to sacrificing their own financial wellbeing year after year.

We met with a business owner in his 70s who had run a successful real estate business for decades. On paper, he’d done well. But the reality was more complicated: He had never built wealth outside the business.

His lifestyle had grown to match (and sometimes exceed) what the business generated. Now, to maintain that lifestyle, he was pulling money from his investments and retirement accounts to prop things up. In essence, the business had to live in order for him to live. And that’s not living.

This pattern doesn’t happen overnight. It builds gradually, through seasons that feel temporary but become permanent. A tough year requires personal sacrifice…then another…then it’s just how things are. The business becomes the priority at all costs, even your own future.

As your advisor, it’s our job to help ensure all of your goals (business and otherwise) are supporting the life you’re working towards.

So, how is it all done?

Smarter Business Goals: Looking Back Before Looking Forward

Before we set sights on the year ahead, we take time to understand what actually happened last year. One of the ways we help you think through this is through what we call a professional and personal “Review and Preview.” These check-ins are designed to help us measure progress, align actions with your goals, and make any necessary adjustments.

For example, when we met with a client at this time last year, he had outlined both his business goals (client acquisition, revenue, assets under management) and then something more personal: he wanted to practice piano three times a week.

Related: Smart Diversification Strategies for Business Owners

Throughout the year, we checked in on all of it, not just the business metrics, but the piano practice. Are you making time for the things that matter outside of work? Are you building toward a life, or just building a business?

This kind of accountability matters. Business owners are often so focused on the entity that they can lose sight of why they built it in the first place. Having someone ask the important questions can be the difference between goals that exist on paper and in bank accounts versus goals that actually shape how you live.

Questions Designed to Connect Your Business Goals to Your Personal Reality

During a “Review and Preview,” we’ll typically ask a few core questions:

• What actually happened last year? Before we look ahead, we take time to look back together. Did you hit your targets? If not, why? If you did, what made the difference—market conditions, a key client, a strategic shift? Understanding what truly drove last year’s results helps us pressure-test this year’s goals and keep expectations grounded in reality, not wishful thinking.

 

• How much did you make, and how much do you actually keep? Your business income is often your personal income (whether you took it home or not). We look closely at what’s showing up on your tax return versus what’s actually landing in your bank account. That clarity is essential for making smart decisions about compensation, distributions, and lifestyle spending.

 

• How much cash truly needs to stay in the business? When we see excess cash sitting on the balance sheet (cash you’ve already paid tax on), we help you define what’s needed for operations and growth versus what can be put to better use in your personal plan. This is where intention replaces inertia.

 

• What do your margins really allow? Revenue alone doesn’t tell the full story. A capital-intensive manufacturing business with thin margins operates very differently than a high-margin services firm. We factor in your actual margin reality so we can set realistic expectations for what your business can sustainably provide.

Every question we ask is grounded in one guiding lens: what does this really mean for you, personally?

Why Your Spouse Needs the Full Picture

Many advisors don’t ask to include spouses in these conversations. We do. We want both partners involved, especially in the initial planning process, because there’s simply too much at stake for one person to hold all the information alone.

One dynamic we see repeatedly: a business owner who understands both the business and personal finances, paired with a spouse who only sees part of the picture. The business-owning spouse is immersed in the details, the other spouse trusts that things are handled, and everyone is happy.

We worked with a business owner who had built substantial wealth, somewhere in the range of $50 to $60 million across his business and investments. His wife’s financial comfort came down to one number: she wanted to know there was $200,000 in the bank. If that number was there, she felt fine.

Related: Defining “Enough” and Planning for Surplus Wealth

And she was fine. But if anything had happened to her husband, she would have been completely in the dark about the rest. The businesses, the investments, the tax implications, the estate structure—all of it would have been a mystery.

What we do in situations like this is open the aperture. We’re not trying to make the non-business spouse an expert. But they need to understand the contours: the general structure of the balance sheet, where the documents are, and who to call if something happens.

Making This the Year You Plan From Your Business

Your 2026 goals are in place. Our focus now is making sure those goals are working for you and supporting the life that business is meant to fund.

That’s why, together, we continue to ask a slightly different set of questions. Not just “How do we grow?” but “How does that growth show up in your personal financial life?”

As your business evolves, new questions naturally come up. If something has shifted, an opportunity has emerged, or a decision is on your mind, reach out. We’re always happy to look at how it fits into the bigger picture.

If you’re not yet working with us, we invite you to schedule a complimentary SWOT Session and learn more about how we partner with business owners to build smarter goals that serve both their businesses and their lives. Because when it comes to what matters most, good is just not good enough.

Key Takeaways: ·       Will Social Security run out of money? The trust fund may be depleted by 2034, but benefits aren’t likely to disappear entirely. ·       Should I claim early to “get mine” before cuts happen? Probably not. Even with a 25% benefit reduction, waiting until age 70 is still often the better financial choice. ·       What changed in January 2025? The Social Security Fairness Act eliminated penalties affecting 2.8 million public service workers, though it adds pressure to the trust fund timeline.

 

It’s hard to miss the Social Security headlines lately: Trust fund depletion. Benefit cuts. Questions about whether the system can sustain itself.

For professionals who’ve spent decades watching that Social Security deduction come out of every paycheck, these headlines land differently. And that reaction makes sense—when you sense scarcity coming, the instinct is to secure what’s yours while you still can.

But here’s what we want you to know:

1. Social Security does face real funding challenges.
2. Your claiming strategy probably doesn’t need a panic-driven overhaul.

Let’s walk through what’s actually happening with Social Security, what the next decade realistically looks like, and why the core math around when to claim remains surprisingly stable.

Related: Retirement Planning for High Achievers

Where We Are Today: Social Security in 2026

Right now, Social Security is functioning exactly as intended and benefits are being paid in full. From a beneficiary’s perspective, everything “works.”

But underneath that surface stability, demographic forces have been creating pressure for decades. In 1945, there were only about two Social Security beneficiaries for every 100 workers paying into the system. Today, there are roughly 37 beneficiaries per 100 workers.

This shift stems from two significant trends working in tandem:

1. First, people are living much longer than Social Security’s architects anticipated when they designed the system in the 1930s
2. Second, families are having fewer children than previous generations

Together, they create strain on a pay-as-you-go system where current workers fund current retirees.

Recent Legislative Change: The Social Security Fairness Act

Before we dig into claiming strategies, there’s one legislative change worth mentioning, particularly if you spent part of your career in public service.

Recently, Congress passed the Social Security Fairness Act, eliminating the Windfall Elimination Provision (WEP) that had reduced benefits for approximately 2.8 million Americans receiving pensions.

This primarily affected teachers, firefighters, police officers in many states, federal employees under the Civil Service Retirement System, and people whose work had been covered by foreign social security systems. These workers often found themselves penalized on their Social Security benefits despite having also worked jobs where they paid into the Social Security system. This year, after the elimination of the WEP, we had one client whose monthly benefit jumped from $950 to $3,600—genuinely life-changing money.

The tradeoff is that eliminating these provisions increases total Social Security payouts, which puts additional pressure on the trust fund and slightly accelerates the depletion timeline. It’s a policy choice that prioritizes fairness for public service workers while making the broader funding challenge marginally more urgent.

2034: The Timeline on Everyone’s Mind

Under current projections, and assuming no policy changes whatsoever, the Social Security trust fund is on a path to be depleted in 2034.

That does not mean Social Security will cease to exist. What it does mean is that incoming tax revenue alone would only cover about 75-80% of scheduled benefits.

In practical terms, if Congress does nothing between now and then, benefits would need to be reduced by roughly 20-25% across the board once the trust fund runs dry. That’s the scenario everyone fears, and it’s the one driving the “claim early before it’s too late” instinct.

But here’s the critical question: Is the only option to solve the funding shortfall a reduction in benefits?

Congress has multiple tools at its disposal to address the Social Security funding shortfall. Understanding these options helps clarify why an across-the-board 25% benefit cut is just one possible outcome. Congress could:

• Reduce Benefits. This gets the most attention because it’s what people fear most. Benefits could be reduced across the board for higher earners and future beneficiaries while protecting current retirees, or adjusted through changes to the cost-of-living formula.
• Raise the Payroll Tax Rate. Currently, workers and employers each pay 6.2% of wages in Social Security taxes (12.4% total). If that rate increased by about 3.65% (bringing the employee share to roughly 9.85%) it would fully address the funding gap. Note that Congress raised payroll tax rates in the early 1980s when Social Security faced a similar solvency crisis. It’s not popular, but it’s a lever that’s been used historically.
• Increase or Eliminate the Wage Base. Here’s something many people don’t realize: You only pay Social Security taxes on income up to $184,500 (as of 2026). Every dollar you earn beyond that threshold is exempt from Social Security tax. Congress could raise this cap to $300,000, eliminate it entirely, or adjust it in various ways to capture more revenue from high earners.
• Adjust the Full Retirement Age (FRA). The government could gradually increase the age at which people can claim full retirement benefits. This reduces the number of years the system pays out while giving the trust fund more time to rebuild. The full retirement age has already been adjusted before, rising from 65 to 67 for those born in 1960 or later.

Now we get to the question that matters most for your planning: Given this uncertainty, when should you actually claim your Social Security benefits? Let’s run the numbers for different scenarios, because this is where the math becomes both fascinating and reassuring.

	If you’re 62 and deciding whether to claim now or wait until 70…	If you’re 67 (full retirement age) and deciding whether to claim now or wait until 70…
No Changes to the System	·       Claiming early means eight years of smaller monthly checks ·       Waiting means your benefit increases 8% for every year you delay ·       The break-even point is age 81 ·       After age 81, you’re better off for every remaining year of your life having waited	·       Claiming now means three years of smaller monthly checks ·       Waiting means continuing to increase your benefit by 8% annually ·       The break-even point is age 78 ·       After age 78, waiting wins for the rest of your life
A 20% Benefit Reduction in 2034	·       The break-even age shifts from 81 to 84—only three years later ·       After age 84, you’re still better off having waited, even with reduced benefits	·       The break-even age shifts from 78 to 80—only two years later ·       After age 80, you’re still better off having waited
A 25% Benefit Reduction in 2034	·       The break-even age shifts to 85 ·       After age 85, waiting still wins	·       The break-even age shifts to 81 ·       After age 81, waiting still wins

Even in genuinely bad outcomes for Social Security, the fundamental strategy doesn’t flip on its head. The break-even ages shift by two to four years—meaningful, yes, but not enough to overturn the core wisdom of delaying benefits when you have the financial means to do so.

If Congress implements a combination of solutions (raising the wage base, increasing the tax rate, and making modest benefit adjustments), the actual impact on your break-even age would likely be smaller than these scenarios suggest.

Beyond the Claiming Decision

Of course, Social Security is just one piece of your retirement income puzzle. We work with you to build a plan that accounts for any number of future scenarios (both good and bad). That typically looks like:

• Maintaining diverse income sources beyond Social Security (investment portfolios, rental income, pensions, part-time work)
• Stress-testing your retirement plan against various scenarios, including reduced Social Security benefits
• Building adequate liquidity so you can delay Social Security without compromising your lifestyle
• Understanding how Social Security fits into your broader tax strategy throughout retirement
• Revisiting your plan regularly as both your circumstances and the legislative landscape evolve

These conversations require the kind of nuance that goes beyond break-even calculators and generic advice. They’re about understanding your complete financial picture and making decisions aligned with your specific goals, resources, and risk tolerance.

Related: Smart Diversification Strategies for Business Owners

Looking Toward the Future

Watching news coverage about Social Security, trust fund depletion, and potential benefit cuts feels unsettling when you’ve paid into this system your entire working life. It feels like the rules are being changed in the middle of the game, and in some ways, they are.

But here’s what we want you to take away: Social Security will need adjustments over the next decade, but those adjustments likely won’t be dramatic enough to fundamentally alter the claiming strategies that have served retirees well for decades.

More importantly, the best defense against Social Security uncertainty isn’t trying to game the timing of your claim. It’s building a comprehensive retirement plan that remains resilient regardless of what policy changes emerge over the next decade.

If this raised any new questions about your Social Security benefits or future retirement income, we’d love to schedule a meeting and run through the numbers with you. We’re here to help you model different scenarios and visualize how potential changes could affect your overall retirement plan.

And if you’re not yet working with The Next Level Planning Group and you’re wondering how Social Security fits into your broader retirement strategy, let’s connect in a complimentary SWOT session. We help professionals like you build retirement plans designed to remain solid, regardless of what changes lie ahead.

 

Plot twist: They might actually be the same thing

Key Takeaways ·       When should I harvest gains instead of losses? During low-income years, you may qualify for the 0% capital gains rate, making it smart to intentionally realize gains. ·       What is “tax gain hoarding,” and why is it a problem? Over-harvesting losses can leave you with a very low cost basis, making it hard to diversify or rebalance without triggering big tax bills. ·       How does volatility affect tax harvesting? The 30-day wash-sale rule forces you to sit in cash or buy substitutes, both risky in volatile markets. Missing a quick rebound can cost more than the tax savings.

Tax loss harvesting can be one of the most powerful tools in tax-efficient investing. When markets drop, realizing losses can offset gains, reduce your tax bill, and potentially save thousands.

But like any powerful tool, it needs to be used strategically. In high-income years, aggressive loss harvesting can save thousands. In low-income windows, strategic gain harvesting can save even more. And sometimes, the best move is doing nothing at all.

The complexity isn’t in understanding these strategies individually. It’s in coordinating them with your income trajectory, liquidity needs, concentration risk, and estate goals, and being willing to adjust as circumstances change.

Related: Click here to read “Roth Conversion Strategies: Our Guide to Smarter Tax and Estate Planning”

When Tax Loss Harvesting Makes Perfect Sense

If you’re in your peak earning years, realizing losses is often the right move. A $10,000 short-term capital loss could save you $3,700 in federal taxes (at the 37% bracket) plus state taxes and Net Investment Income Tax. Over a career, these savings compound significantly.

Loss harvesting also works beautifully for long-term wealth you won’t touch for decades. You defer taxes now, let the money compound, and your heirs may receive a step-up in basis that eliminates the gains entirely.

The strategy becomes problematic only when it’s applied reflexively—regardless of your income level, timeline, or portfolio composition. That’s when ‘good tax planning’ can accidentally create bigger problems.

The Myth: “Capital Gains Are Always Bad”

We recently met with a couple in their mid-50s whose income dropped sharply when the husband left a corporate job to start a consulting business. When we asked what tax strategy they used during that first low-income year, he said, “Nothing. We just enjoyed not paying taxes.”

But once we reviewed their portfolio, we found over $1 million in embedded gains across a few concentrated stocks. During those low-income years, they could have realized $100,000–$150,000 in gains at a federal tax rate of 0%, an opportunity their previous advisor missed entirely.

Most people assume capital gains are always taxed at 15%, but today’s tax code includes a 0% bracket for many taxpayers in lower-income years. In other words, they had a free chance to reset their cost basis, and no one told them.

When we showed this couple what they’d missed, they were (rightfully) furious. Those tax-free gains are now gains they’ll have to realize later, likely owing tens of thousands in unnecessary taxes.

Related: Click here to read “Smart Diversification Strategies for Business Owners”

The 0% Strategy: In years when your income is unusually low, you can intentionally realize capital gains and pay zero federal tax. It’s a rare window to clean up your portfolio for free.

And career transitions aren’t the only time this strategy shows up. We regularly see 0% capital gains opportunities in situations like:

• Business owners with major write-offs: Large equipment purchases or other capital investments can create big deductions. In some years, clients’ taxable income drops so low that they can realize significant capital gains at a 0% federal rate.
• Early retirees before Social Security: Those “in-between” years after leaving a primary career but before turning on retirement income are often ideal for strategic gain harvesting.

Ultimately, the sophistication isn’t in avoiding gains; it’s in timing them. Our goal is for you to pay 0% when possible, 15% when necessary, and avoid the 20%+ bracket whenever we can.

What Happens When You’re Too Good at Harvesting Losses?

A few months ago, we reviewed a $1 million portfolio for a prospective client whose previous advisor had been overly aggressive with tax loss harvesting, selling every possible loser to offset gains.

The result was a cost basis under $400,000 and more than $600,000 in embedded gains.

They wanted to rebalance, diversify, fund 529s, and pay down their mortgage, but psychologically, they were stuck. It can feel impossible to realize a $600,000+ gain, even though the gain exists whether they sell or not.

This is tax gain hoarding: letting so much appreciation build up that your wealth becomes functionally “trapped.” Beyond the psychological hurdle, tax gain hoarding creates some very real (and very expensive) problems:

Concentration Risk

We see this all the time with employee stock purchase plans. You buy shares at a 15% discount, hold them for a year to avoid short-term gains… then the stock jumps 40%, and you don’t want to sell. More shares vest, those have gains too, and before you know it, a huge chunk of your wealth is tied to one company, all because you’re avoiding taxes.

That original discount was found money. Our motto: Don’t let the tax tail wag the investment dog. Tax decisions shouldn’t override the bigger-picture strategy we’ve built with you.

Portfolio Drift

If we’ve designed a 50/50 mix of stocks and bonds, and stocks experience a strong rally, the allocation can shift to 60/40 or even 70/30 over time.

When that happens, we evaluate whether rebalancing is appropriate, considering both the investment implications and the tax impact, so that your portfolio doesn’t quietly take on more risk than intended.

Tax Loss Harvesting: If it Feels as Simple as Mowing a Lawn, You’re Doing it Wrong

The complexity of tax loss harvesting becomes especially clear in volatile markets. When you harvest a tax loss, the wash sale rule requires you to avoid buying the same (or “substantially identical”) investment for 30 days, leaving you with two imperfect choices:

Imperfect Option 1: Sit in Cash

You sell the position and wait out the 30 days. But if the market rebounds—say 8% on $100,000—you’ve just missed an $8,000 gain. In many cases, that loss outweighs the tax benefit.

Imperfect Option 2: Buy a Substitute Investment

Instead of sitting in cash, you swap into something similar by selling the S&P 500 fund and buying a large-cap fund.

After 30 days, do you sell the substitute? If it’s up, you may trigger short-term gains, taxed at much higher ordinary income rates. If you hold it for a year to get long-term treatment, you might still end up with gains you never intended to create.

This is where a sophisticated approach matters most. In down markets, there are more loss-harvesting opportunities, but the stakes of getting the execution wrong are also higher.

The key isn’t just knowing that you can harvest losses. It’s knowing when it’s actually worth doing.

A Smarter Approach to Tax Harvesting

The smarter alternative to reflexive loss harvesting or gain hoarding starts with your specific goals and timeline.

If you’ll need money from an account soon, we avoid strategies that could trap you with unnecessary embedded gains. For long-term or legacy assets, we tailor the opposite approach (harvesting losses and holding gains) because your heirs may receive a step-up in basis that eliminates those taxes entirely.

We also proactively watch for low-income windows where you can potentially realize gains at 0% or reduced rates.

All of this works because we’re looking at the full picture of your tax bracket, cash flow, allocation, estate goals, concentration risk, and income sources.

If you have any new questions or are wondering what harvesting opportunities we’re looking at on your behalf right now, reach out—we’d love to offer clarity wherever we can.

And if you’re not yet working with us, this integrated approach is exactly what we built TNLPG to deliver. If you’d like to explore whether this partnership is a fit, you can learn more about our introductory SWOT Session here.

 

Tax-law is subject to frequent change; therefore it is important to coordinate with your tax advisor for the latest IRS rulings and specific tax advice, prior to undertaking an investment plan. Any tax or legal information provided here is merely a summary of our understanding and interpretation of some of the current income tax regulations and is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation.

A practical, high-impact guide to closing the year intentionally

Key Takeaways:·       When should I start year-end tax planning? Now. The strongest strategies need coordination between your wealth advisor and CPA well before December 31. ·       What’s the difference between reactive and proactive tax planning? Reactive planning reports what already happened. Proactive planning creates opportunities to reduce your tax burden throughout the year and into the future. ·       Can you really save taxes on charitable giving even with the high standard deduction? Absolutely. Through strategic approaches like bunching donations and donor-advised funds, you can potentially capture meaningful tax benefits.

April usually claims the tax planning “spotlight,” but we can’t change the script after the play is over.

Some of the most impactful work often happens right before the calendar flips. In the year’s final stretch, strategic decisions can help turn into real clarity and momentum for what’s next.

That’s why year-end is when we’re reviewing your numbers, coordinating with your tax professionals, and making any needed adjustments before January arrives. Think of this checklist as a peek into the key areas we’re already watching on your behalf and the smart, thoughtful levers we pull to help you close out the year with intention.

Our Year-End Tax Planning Checklist: Charitable Giving, Roth Conversions, and Beyond

CPA Coordination: Turning Reactive Tax Prep into Proactive Planning

One of the biggest advantages of year-end planning is making sure your financial life and your tax strategy are actually working together. Most CPAs excel at what they’re designed to do: ensuring compliance and reporting what already happened. That’s incredibly valuable and necessary. But what often gets missed is the proactive coordination before year-end, where strategic timing can turn good tax preparation into powerful tax planning.

That’s where our role shifts from “advisor” to “connector.” We bridge the gap between your financial plan and your tax return, making sure the smart ideas don’t show up as surprises in April. Part of this coordination is making sure strategies don’t accidentally work against each other. For example, timing a Roth conversion, charitable gift, and loss harvesting in the wrong order can reduce the potential impact.

When the right conversations happen now, not months after the year closes, you get a smoother filing season and a strategy that supports the bigger financial picture we’re building together.

What we make sure is happening for you:

• Sharing the right information with your CPA before year-end, not after
• Making sure tax-loss harvesting, Roth conversions, and charitable strategies are clearly reflected in your tax plan
• Flagging anything unusual (income dips, business changes, big transitions) that should factor into your tax approach

Tax-Loss Harvesting: Looking Beneath the Surface of Your Portfolio

One of our biggest annual to-dos is looking at your tax-loss harvesting opportunities. When we review your accounts for tax-loss harvesting, we’re not relying on the single gain/loss line you see on your statement. That number is just the headline.

Behind that headline are many separate “lots,” created each time dividends reinvest, and each with its own gain or loss. An investment can show an overall gain while still holding pockets of losses worth capturing. That invisible layer is where the real opportunity lives, and it’s why this process can make a meaningful difference—sometimes even saving clients tens of thousands of dollars.

Quick Recap: What’s a “Lot-Level Analysis?” A lot is a mini-purchase of the same investment. Every time you buy shares or your dividends reinvest, you’re creating a new lot, each with its own price and gain/loss. A lot analysis is like taking an X-ray of those hidden layers, letting us pinpoint the smartest shares to sell for tax savings without tripping wash-sale rules.

Most investors can’t see this hidden layer on their statements, and most can’t evaluate it on their own. Identifying the right lots to harvest (without derailing your long-term strategy) often requires professional-level tools and careful coordination.

What we’re assessing for you:

• Which hidden lots are worth harvesting (and which aren’t)
• How the timing aligns with your income and current tax bracket
• How to execute the move cleanly without affecting your long-term strategy

Retirement Contributions: The Low-Hanging Fruit

Before we move into the more advanced strategies, we always start with the simplest (and surprisingly powerful) question: Are your retirement contributions where they need to be before year-end?

This is the “low-hanging fruit” that can quietly add up over time. Making sure these dollars land in the right place (and on time) sets up everything else we do together—and helps ensure you’re getting every available benefit before the calendar resets.

What we’re checking on your behalf:

• Whether you’re on pace to max out your 401(k) or still have room to contribute
• If you’re eligible for a deductible IRA contribution and whether it makes sense
• For solo-preneurs, whether your Solo 401(k) or SEP IRA needs a final boost
• Whether any changes in income or employment this year affect your contribution strategy

Roth Conversions: Taking Advantage of Low-Income Windows

Some tax strategies require critical timing, and Roth conversions are one of them. The opportunity usually appears when life shifts, like between retiring and collecting Social Security, when a job change creates a dip in income, or when your business has a slower year.

These “low-income windows” can quietly open the door to moving money from an IRA to a Roth IRA at a far lower tax cost than otherwise.

What we’re evaluating together:

• Whether you’re in a temporarily lower tax bracket this year
• How much room is left in your current bracket before triggering a higher one
• Whether converting now reduces what you’d pay later in retirement
• How the move aligns with your long-term plan and cash flow

We’ve seen the impact of this firsthand. One client hit a multi-year stretch of unusually low income, and we were able to convert almost $800,000 to Roth with virtually no tax.

That’s an unusually big example, but the takeaway is universal: When your tax bracket dips, even briefly, a well-timed conversion can create lasting, tax-free growth.

Related: Click here to read “Roth Conversion Strategies: Our Guide to Smarter Tax and Estate Planning”

Charitable Giving: Making Sure Your Generosity Counts

Charitable giving is deeply meaningful for many clients, but the tax benefits may not be as significant as expected. With today’s higher standard deduction, many retirees (especially those without a mortgage) end up giving year after year without receiving any tax benefit, simply because their contributions don’t exceed the $33,100 standard-deduction hurdle for married couples under 65 (couples over 65 receive a higher standard deduction based on their income).

That’s where strategies like bunching and donor-advised funds (DAFs) can help. Instead of smaller annual gifts that get swallowed by the standard deduction, you can combine several years of giving into one larger contribution, often using low-basis stock, to unlock a deduction now and then distribute donations to charities over time. The IRS allows deductions up to 60% of your income for cash and 30% for stock, with unused amounts carrying forward.

These strategies and others make sure your generosity counts on both the heart and the balance sheet.

What we help you consider:

• Whether your current giving is producing any tax benefit
• If “bunching” several years of donations into a single year would get you over the standard-deduction hurdle
• Whether a donor-advised fund would let you make a larger, strategic gift now and give to charities gradually over time
• Whether cash or low-basis stock is the smarter funding choice

Related: How Donor-Advised Funds Can Help High Achievers Build Lasting Charitable Impact

529 Contributions: Capturing State Tax Benefits Before the Deadline

For clients who contribute to 529 college savings plans, the year-end deadline matters more than most people realize. Many states offer a state income tax deduction for contributions, but only if the money hits the account before December 31. It’s an easy win, and one we make sure not to leave on the table.

Even if you contribute regularly throughout the year, we still double-check whether a final top-up makes sense. A small year-end contribution can sometimes create a meaningful state tax benefit, and it’s one of those simple moves that’s easy to miss in the holiday rush.

What we review:

• Whether your state offers a tax deduction for 529 contributions
• How much additional contribution (if any) maximizes the benefit
• Whether it makes sense to fund multiple 529s for kids, grandkids, or other beneficiaries
• How this fits alongside your broader savings and cash-flow picture

It’s a straightforward strategy, but timing is everything. A well-placed contribution before year-end can help support education goals and reduce your state tax bill, all with one clean move.

Ending the Year with a Clear, Cohesive Plan

Everyone’s tax picture is different, which is why we tailor our approach to your income, goals, and life stage. We start with the fundamentals, making sure opportunities like retirement contributions don’t slip through, then move into more sophisticated strategies when they make sense.

The strategies in this checklist work best when we can act quickly. If anything here raised new questions about your specific strategy, or if your circumstances have shifted since we last connected, please reach out to your advisor. These final weeks of the year can create opportunities that simply won’t exist in January.

And if you’re reading this and realizing you don’t currently have advisors looking at these strategies on your behalf, let’s talk about what that partnership could look like in a complimentary Financial SWOT session. Because when it comes to what matters most financially, good isn’t good enough.