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Let's talk today about what I'm going to say is the biggest mistake I see high income people making today. And high income, it doesn't matter if you're W-2 or if you're a business owner. I really see this applied everywhere. And it's fundamental in nature. It makes sense to me why people are doing it. Heck, I do it myself, you know, when I want to. Like my inclination is to make the same mistake that I think a lot of you might be making, or maybe a lot of your friends or colleagues are making. And what is it? Well, it's not investment related. You know, we're very heavy investing on this podcast, but really it's tax related. All right, so buckle up here. Uh we're not, it's not going to be a long podcast, but I want you to be thinking about this because this is going to come out, you know, let's say third, fourth quarter of the year, right as you're starting to think about end of year, maybe some tax planning or into next year. And the biggest mistake, in my opinion, that I see people making is deferring taxes, kicking the tax can down the road. That's very different than avoiding taxes. There's not a lot you can do to avoid taxes indefinitely, right? There's just not. Um, an HSA would be an example, a health savings account would be an example of really literally never paying taxes because it's the only thing I can think of off the top of my head that the government says if you put a dollar in a health savings account, you get a deduction this year, so you're not paying tax. You can invest most of it, and so you can grow it without paying tax. And then as long as you pull it out for qualified medical expenses in the back end, you won't pay tax. So quite literally, you've never paid tax on that. Now, the the problem is I forget what the exact number is, but you can put like $8,600 into that this year for a family. So it's not a lot. Um, outside of that, there's not a lot of ways to completely avoid tax. But what I think is happening is that people are thinking the deferral is the avoidance and it's not. Now, for anybody who's, you know, gonna email me or or you know, DM me or get to me somehow and say, well, there's there's benefit to the deferral. I'm not arguing that. You're exactly right. There is absolutely a benefit to deferring tax and earning money, you know, during the interim. But in my opinion, okay, so I've been doing this 30 years now. So I've got people who are like 20 years with me and now coming into retirement. So they're they're starting to pull that lever. Or really more to the point, what I'm starting to see is people who are coming to me, they're being referred to me after having either done it themselves or working with somebody else for 15, 20, 25 years. And I'm seeing very, very, very heavy deferral. That could be a 401, just to use layman's terms, a 401k. You know, you come to me, you've got two and a half million, three million dollars in a completely tax-deferred 401. And we start talking about things like required minimum distributions or legacy planning as you pass that on to your uh kids or grandkids and how fast they got to take the money out and they're gonna be taxed on it. And people, generally speaking, aren't happy with that. You know, now they're starting to look at things like should we be doing Roth conversions, which is just a way to get your money from a taxable situation to a tax-free in the future situation. I would say, you know, if you're in your 40s right now, uh, early 50s, 40s, definitely in your 30s, I would not necessarily be kicking that can down the road. We don't know where tax rates are going to be in the future. And listen, I've been saying this for a long time, not just me, but a lot of my colleagues. And we would get made fun of all the time. I mean, people, I'm talking about in the late 90s and the early 2000s, and we'd be talking about things like, hey, maybe you shouldn't be maxing out that tax-deferred 401k. Maybe you should be doing brokerage investing or other types of things first. And um, you know, we were met with a lot of uh a lot of pushback on that, both from clients and from um advisors. In fact, a lot of CPAs pushed back on that. And now if you speak to CPAs of high-income individuals, they'll be the first to tell you, you know what, deferring forever is not a great idea. Uh, you got some unknown future potential tax bomb in the future. Why don't we control the taxes? So that's on the um W-2 side. You know, 401k is primarily, uh, primarily the way that you'd go about that. I would say maybe start looking at the Roth portion of that. You know, most employers have that now. Uh, you can choose a Roth. I think that's a good option. You know, there's other ways you can do it, or maybe investing in things that are mostly capital gain related uh or have heavy capital gains, which tends to be at a lower rate than ordinary income. Those are options for you. If you're a business owner listening to this, like you've got a lot more possibilities in order to deduct or to depreciate, or, you know, like real estate's an example, or machinery, or all these things. Um, you can defer income as a business owner in certain ways. You can also do this as a highly compensated executive, you know, deferred comp if you're listening and you're you're you're thinking, what is that? Think of your deferred comp plan. Again, business owner's depreciation, deferred comp as a um executive, or just a high income W-2 deferring money down the road, it's all the same animal, right? They're all cousins. It's all kicking that can down the road. You absolutely will deal with that tax in the future. The only way that you will not, okay, so if you're a business owner, or say you're a real estate investor or an equity investor, and you defer, defer, defer, defer, defer, right? You you've you move money from one real estate property to the next, or you just continue to depreciate and you know the company grows in value, et cetera, and you die, and there's a step up and basis to your errors. You've won, but you're dead. So uh, you know, I'm kind of joking a little bit there, but really that's the only way to avoid the tax indefinitely. As long as a step up and basis on things like real estate and um equity ownership outside of retirement plans is a thing, if that never changes, uh, then your errors will actually uh reap the rewards of that, and you've never paid the tax. Uh, but that's not generally speaking the plan that most people are putting in effect when they're 30 and 40 years old. They're not thinking about that. They're just thinking about, hey, I don't want to pay the tax now. And so there's just, I'll just deal with it later. But later will come. You know, time passes anyway, and all that compounding in there, all that depreciation you're doing, you're gonna have to deal with at some point. So, what's the biggest mistake I'm seeing right now? I'm seeing high-income business owners and high-income executives and W-2 kicking that can down the road. And all I'm saying is maybe we should talk about that. Let's look at maybe not putting all the money there, maybe a third of the money there. Let's look at other things that we can do so that on the back end, we're not forced with liquidating at a high tax bracket or pulling all the money out as ordinary income. And we've got some different levers to pull. So as we enter kind of the last parts of 2026, you know, into the fall of 2026, and you're starting to think about 27 and taxes. This might be a good time for us to talk and just sort of look at. Well, what are you doing? Um, you know, if you're new to me and that's what you have been doing, let's just talk about it and take a peek at it. Maybe it's working great for you and you should continue it, but it is something that I see a lot of people uh regretting on the back end.

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Joseph Delisi is a registered representative and financial advisor of Park Avenue Securities, LLC, OSJ 5280 Carol Canyon Road, 300 San Diego, California, 92121-619-648-6400. Securities products and advisory services offered through PAS, member FINRA SIPC, financial representative of the Guardian Life Insurance Company of America, Guardian, New York, New York. PAS is a wholly owned subsidiary of Guardian. Westpac Wealth Partners LLC is not an affiliate or subsidiary of PAS or Guardian. Insurance products offered through Westpac Wealth Partners and Insurance Services, LLC, a DBA of Westpac Wealth Partners LLC. CA Insurance License No. D34103. This podcast is for informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Guardian and its subsidiaries do not issue or advice with regard to mortgages, property and casualty insurance, and or car insurance. Consult your tax, legal, or accounting professional regarding your individual situation. All investments and investment strategies contain risk and may lose value. Diversification does not guarantee profit or protect against market loss. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Investing in securities of smaller companies tends to be more volatile and less liquid than securities of larger companies. Investing in the bond market is subject to certain risks, including market interest rate issue or credit and inflation risk. This material is intended for general use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. Past performance is not a guarantee of future results. Indices are unmanaged and one cannot invest directly in an index.