The Power Of Zero Show

We know for sure that we currently have three more years of historic tax rates. The good news is that it's fairly likely that those tax rates will be extended for another eight years, giving us a wider window of opportunity. Congress has essentially removed the limits on how much money you can convert to a Roth IRA. All you have to do is decide how much tax you want to pay. Most people assume that the 0% tax bracket is David's favorite, but it's actually the 24% tax bracket. For only an additional 2% in tax, you can convert an extra $170,000 to tax-free each year. The 24% tax bracket is the sweet spot in the Trump Tax Cuts. The 24% tax bracket is still lower than the future level of the 22% tax bracket. The average American is going to end up in the 40% to 45% tax bracket when everything gets settled, which will be a significant change for people in a negative way. Denmark has a 50% tax rate, but in exchange the population gets universal health care, paid sick leave, paid maternity leave, and more. When the US gets to that point, it will all go to service the national debt. David's least favorite tax bracket is the 32%. Even if the tax cuts aren't extended, which is unlikely, the future version of the 24% tax bracket is 28%, which is still lower than the current 32%. Don't preemptively bump up into the 32% tax bracket because you think you've got all the heavy lifting done before 2026. Everybody's situation is different so it's very important to work with a financial advisor and go through the financial planning process to find what's right for you. When doing a Roth conversion, the ideal method is to pay taxes from an account other than the conversion itself, preferably the taxable bucket. If you don't have enough money in your taxable bucket, withholding is your only other real option but you have to take into account the additional tax on withholding. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free 3-part video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

The Trump tax cuts went into effect at the end of 2017, but because they lacked a supermajority of approval in Congress those tax cuts had an expiration date. David has long maintained that the government won't let those tax cuts expire. There is a broad swath of Americans that are responsible for getting the current politicians re-elected and those people have short memories. If taxes go up, they're going to blame those same politicians. No politician wants to be responsible for raising taxes on that many Americans. There is a high likelihood that if you are in the 10%, 12%, 22%, or 24% tax brackets, those tax brackets will be extended until 2031. If you're construed as someone who earns a higher income, you're probably going to face higher tax brackets. Politicians seem to be focused on the 24% tax bracket and below. The implications of these tax cuts being extended are vast. In 2018, we cut taxes and raised expenses, which was exactly the opposite of what we needed to do as a country. By extending these tax cuts, we're kicking the can down the road and the fix is going to have to be even more draconian. We are currently spending our children's future because there is no courage in Washington. The debt ceiling is upon us once again and Congress is waiting until the very last minute to do anything about it. The debt continues to rise for a variety of reasons. We've had Covid relief, wars, and tax cuts that led to additional borrowing. In the near future, the debt will be going up primarily because of Social Security, MediCare, and Medicaid. It's projected that the national debt will be around $51 trillion by 2033. Even if we stay at historical interest rates we would struggle to be able to afford to pay that. President Joe Biden wants to raise the debt ceiling so that Congress can pay for things that have already been approved. If the US defaults on its debt, most experts predict a recession, if not a depression, millions of people would lose their jobs, interest rates would go up, the country's credit rating would plummet, and the status of the US dollar as the world's reserve currency would be in question. Even if people got their Social Security checks in that situation, there would be so much chaos in the economy that it would hardly matter. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free 3-part video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

For David, financial gurus seem to hold a deep hatred for permanent life insurance – be it whole life, universal life, index universal life, or variable life. A key question to ask: with so many financial gurus against life insurance, how can we conclude that it should be integrated into a balanced, comprehensive approach to tax-free retirement? David believes that such an approach stems from the fact that these gurus address a huge homogenous audience, who's generally drawing in debt, and that they don't have the luxury of nuanced explanation. Everything they discuss should either be good or bad. Ed Slott, who the Wall Street Journal called 'the best source for IRA advice', is an expert whose approach differs from the ones mentioned above. Slott sees life insurance as an investment that's better than your typical investment accounts for the fact that it's tax-free. Slott goes so far as to say, "Roth IRAs and life insurance can single-handedly remove most of the taxes you or your beneficiaries will ever have to pay." The difference in approach between Ed Slott and other financial gurus has to do with Slott's 30 years of experience working with actual clients that has allowed him to observe the impact that cash value life insurance has on the lives of retirees and their beneficiaries. Ed Slott is not a financial guru using a one-size-fits-all strategy for the masses. He's an educator who understands the IRS tax code and who clearly knows that tax planning and retirement require nuance, especially if you have substantial assets. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free 3-part video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com I'll Teach You to Be Rich (book) How to Get Rich (Netflix series) Dave Ramsey Suze Orman The Total Money Makeover Ed Slott

The decision of whether to contribute to a Roth 401(k) or a Traditional 401(k) all comes down to whether you are likely to be in a higher tax bracket than you are now when you retire. The only determining factor in whether you should contribute to a Roth 401(k) is what you think your tax rate will be when you retire. David takes an example of two twin brothers and compares the difference between a Traditional 401(k) and a Roth 401(k) over the course of 30 years. The takeaway is that if tax rates remain the same, both plans are identical, but if tax rates are even just 1% higher than they are today then the Roth 401(k) will always win. If tax rates go up, the Roth 401(k) wins hands down. If tax rates stay the same, then both plans will get the same results. The only scenario where the Traditional 401(k) wins is in the unlikely event tax rates are lower in the future. Some economists have suggested that tax rates will have to double by 2030 just to keep our country solvent. In his book Comeback America, former Comptroller General David Walker predicted that average effective tax rates in the US would have to rise to 45% by 2030 to pay for unfunded obligations, Social Security, MediCare, Medicaid, and interest on the national debt. The farther out your investment horizon the more likely your tax rate in retirement will be substantially higher than it is today. With the passage of the Secure 2.0 Act, you now have the ability to direct your employer's match to the Roth portion of your 401(k). When you retire, it is important to have some tax-deferred income in order to maximize your standard deduction. If you have all your money in your Roth 401(k) then your standard deduction will stand idle and you will have paid taxes on your contributions unnecessarily. The goal should be to allocate the lion's share of your retirement money to your Roth 401(k) to protect you against future tax rate increases, and have the match put into the tax-deferred portion of your 401(k) so it can be offset by the standard deduction in retirement. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free 3-part video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

When it comes to investing, I'll Teach You to Be Rich author Ramit Sethi sees whole life insurance, annuities, and Primerica as major red flags. David believes that, in the Netflix documentary How to Get Rich, Ramit Sethi makes sweeping insurance product condemnations with little or no evidence to support his case. If David had a chance to sit down with Ramit Sethi, there's a series of questions he would like to ask him, including "Why are annuities bad?" Yale Professor Robert Schiller recently affirmed that bonds aren't the best solution for managing risk in retirement. While analyzing 10-year returns for stocks, bonds, and fixed index annuities, Schiller uncovered four startling truths. For David, if you were to reach into your retirement portfolio, remove the bonds and replace them with a fixed index annuity, you would increase returns while safeguarding that portion of your portfolio against loss. The 4% Rule says that if you have a 60-40 stock-bond mix, the most you can take from your portfolio, and maintain a high likelihood of not running out of money before you die, is 4% per year (adjusted for inflation). If you have done a good job saving money, don't take advice from financial gurus who are dispensing one-size-fits-all financial planning advice on Netflix. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free 3-part video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com I'll Teach You to Be Rich (book) How to Get Rich (Netflix series) Dave Ramsey Suze Orman Prof. Robert Shiller Dr. Roger Ibbotson Yale University

Dave Ramsey contends that the IUL is a ripoff primarily because of two reasons: high fees and surrender charges He also recommends that if you have an IUL to surrender it immediately, thereby incurring those surrender charges immediately. The reason companies have surrender charges is to cover the costs of getting the program off the ground. They start off high and reduce gradually over the first fifteen years or so. The question is, 'Is the surrender schedule something that should weigh on your decision to do an IUL?' The answer in most cases is no, as long as you plan on keeping the plan until death do you part. An IUL is like getting married. You have to investigate the alternatives before choosing the one that's right for you. If Dave Ramsey adopted the same approach with the taxes and penalties in your 401(k), he would be singing a different tune. If you were to take $100,000 out of your 401(k) at the age of 40, you'd end up paying the penalty and taxes at your current tax bracket, likely resulting in $40,000 in penalties. The penalty schedule also doesn't reduce over time when you consider that you're likely to bump up into higher tax brackets. The first fifteen years of your IUL, 401(k), or IRA are the years you should least want to access that money. Like traditional retirement plans, IULs are generally long-term propositions. Don't start an IUL if your plan is to take the money out in the first ten to twenty years. If Dave Ramsey has a problem with the IUL surrender charges, he should likewise have a problem with all the taxes and penalties you will pay on your traditional retirement accounts over a much longer period of time. The IUL only really works as part of a comprehensive approach to retirement and getting to the zero-percent tax bracket. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

If you have the lion's share of your wealth in a tax-deferred bucket, you have actually played your cards perfectly. You probably allocated that money at a time when tax rates were likely higher, and right now tax rates are at historic lows. This is the perfect time to move things into the tax-free bucket. The question is 'How long will these historically low tax rates last?' Traditional thinking says tax rates will revert to higher rates in 2026, but that seems pretty unlikely to happen. No politician wants to be the one that raises taxes on the largest voting block in America. The most likely scenario is that Congress will extend the Trump tax cuts at some point between now and 2026 for another eight years. This may be the most important eight-year window in your life, given where tax rates will have to go into 2030 and beyond. Citing out-of-control spending on Social Security, MediCare, MediCaid, and interest on the debt, former Comptroller General David Walker has predicted that tax rates will have to double in or before the year 2030. Slowly shift your tax-deferred bucket into the tax-free bucket now while there is still time. The 24% tax bracket is the greatest sweet spot of all sweet spots. It's only 2% more than you're likely paying right now and it allows you to shift an additional $170,000 a year to tax-free. The 24% tax bracket is better than the future version of the 22% tax bracket, which is 25%. Every year that goes by where you fail to take advantage of the 22% and 24% tax brackets is potentially a year beyond 2030 where you could be forced to pay the highest tax rates you're likely to see in your lifetime. Take advantage of the next 8 years to preemptively pay taxes on your retirement assets so that by the time tax rates potentially double, you've done all the heavy lifting and can withdraw those assets tax-free. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

The internet is full of naysayers that are convinced the Indexed Universal Life Insurance Policy (IUL) is a ticking time bomb, but the question is "what does the evidence show?". Over the last fifteen years we've seen catastrophic market declines and near-zero interest rates for a protracted period of time. This has created the perfect conditions to measure the effectiveness of the IUL. The stock market is one of two things that drives the return of the IUL, the second and more important factor is interest rates. You should expect target rates of return between 6% and 8% within your IUL, and the last 15 years have been a great laboratory to measure the effectiveness of accomplishing that goal. The first example is a company that dates back to 2006, and despite the ups and downs of the market, the IULs have managed to keep pace with that projection. The second example uses a set of historical returns back to 2006 as well, and averages them out to show a return of just over 7%. The third example is a policy that goes back to 2009, enduring the ups and downs of the market and still showing a return of 8.03% over that time frame. When you subtract the 1% in fees in the life of the program, you will be netting 5% to 7% over the life of the contract. This is why the IUL is not a replacement for the stock market portion of your portfolio, but is great as a bond replacement. Reach into your portfolio and remove the bonds. Replace it with IUL and you will increase your return, lower your risk, and lower the standard deviation of your entire portfolio, and experience a better outcome over time. Assessing the success of your IUL is a matter of tempering your expectations and making the right comparisons. They only really work if you keep them for your entire life but they do that admirably by providing a death benefit that doubles as long-term care, as well as the ability to grow tax-free wealth safely and productively. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

In a recent video a high school senior called in to Dave Ramsey's show where he offered some good advice but also played down the severity of the nation's debt crisis. Dave refers to two different books on how the national debt was going to ruin the country back in the 80's, which obviously did not come to pass. The trouble is not the level of debt a country has in general, it's how much debt there is in relation to their gross domestic product. This is why the current situation is different. The single most important measurement is the debt-to-GDP ratio. According to the World Bank, a healthy debt-to-GDP is 77% or lower. Right now, the debt-to-GDP ratio is trending well beyond that threshold over the next 16 years. Dave claims the average American investor should not have to worry about the national debt. While that's partly true, what they really should be worrying about is the kinds of accounts they are investing their money in. Former Comptroller General David Walker explicitly predicted that by the time 2030 rolled around the national debt would be so high and out of control that the government would have to raise effective tax rates on middle America to 45%. Given the abundance of studies highlighting the dangers of the national debt, Dave Ramsey dropped the ball on helping a huge number of listeners. Americans of all ages should be concerned about the national debt. It should spur you to consider when you want to pay taxes, either now when they are at historical lows or roll the dice and see what happens in the future. Dave Ramsey is underestimating the risk of the national debt on the fiscal outlook for the US, and he missed an important opportunity to inform more Americans. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

A recently published study claims that taking income from permanent life insurance and annuities in retirement can create a better outcome for investors. Ernst & Young compared five different strategies including investments only, investments and term life insurance, permanent life insurance and investments, deferred income annuities, and a combination of #3 and #4. In their comparison, Ernst & Young considered insurance products part of the fixed income allocation and bond replacements. They also used the permanent life insurance as a volatility buffer, where they access the cash value of the policy to pay for lifestyle needs during periods of market volatility, similar to the concept in the best-selling book, The Volatility Shield. They ran 1,000 Monte Carlo comparisons with the goal of measuring sustainable income, and they used ordinary income tax rates. Each income scenario sustained a minimum of 90% probability of success. In the investment-only approach, it's only inefficient from both an income perspective and from the legacy perspective. The strategy that produced the greatest combination of income and wealth to heirs is the scenario where 30% went into a permanent life insurance policy, 30% into a deferred income annuity, and the balance into investments. They recast the numbers for couples in different age brackets, but the results were essentially the same. The permanent life insurance policy used in this study was whole life insurance, which meant that the loans taken in retirement had to ultimately be repaid out of the investment portfolio. Had they instead used indexed, universal life insurance in the comparison, they could have shown a higher rate of return over time and guaranteed a zero-percent loan provision for the volatility buffer concept. In other words, they could have taken tax-free and cost-free distributions from their life insurance, saving money on interest payments and avoiding the phantom tax bill from the IRS. The conclusion of the study is accurate, but, by switching out the permanent life insurance for indexed universal life insurance, they would have improved their outcome even further. If they ran a scenario where tax rates doubled over time, the scenario would have pulled even further ahead than the investment-only scenario. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

IUL and whole-life policies both have their place. Whole-life advocates prefer it because your cash value is guaranteed to increase each and every year as the IUL has growth that is tied to the upward movement of a stock market index. The downside to the IUL is that down years do happen, and in those years you get credited a zero but still have the expenses associated with the IUL. David goes through a scenario where all premiums within a LIRP go to the IUL's fixed account. By allocating money in this way, you will net a consistent rate of return that is not linked to the upward movement of a stock market index, even during a down year. By allocating your premiums to your IUL's fixed account, you can recreate all the attributes of the whole-life policy inside the IUL, only on a supercharged basis. To discover the companies that David used to model this scenario, email him at [email protected] The scenario takes a 40-year-old male contributing $20,000 per year until the age of 65. In either model, the factors were averaged out to make the comparison as fair as possible. Starting with the whole-life policy, at age 66 it produced a loan of $42,675 every year until the age of 100. That is cumulative distributions of $1,493,625. The IUL is able to produce a loan of $48,084 every year until the age of 100, with cumulative distributions of $1,683,940. If you are just comparing maximum loans on the backend, the IUL comes out on top. Whole-life policies do not have guaranteed zero-percent loan provisions which is one of the reasons that policy lags behind. With that being said, you wouldn't want to use an IUL for its fixed account. Using a slightly different model, the benefit of the IUL races ahead considerably. At 7% growth, the loan value jumps to $100,100 and the cumulative distributions go to $3,503,500. By allocating your premiums to the fixed account inside of a maximum funded IUL, you can generate more income than you would inside a maximum funded whole-life policy. By taking a little more risk in your IUL and tying the growth of your cash-value to the growth of a stock market index up to a cap, you can more than double your annual tax-free distributions. Mentioned in this episode: David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

Janet Yellen appeared in front of a Senate Finance Committee in March where explosive testimony erupted when a senator from Louisiana asked a line of questions regarding the impending insolvency of Social Security. The Social Security Trust Fund is due to go broke in nine years, at which point recipients will receive 24% fewer benefits when that happens. Of the $4.5 trillion in taxes proposed by President Joe Biden, none of those tax increases are earmarked for shoring up Social Security. A bipartisan group of senators has made repeated requests to meet with the president regarding the plan for Social Security, all of which have been ignored. President Biden has proposed increasing the taxes on individuals making over $400,000 to address these issues. The challenge with that is, in order to put the nation on a sustainable path, tax rates would have to rise to absurdly impractical levels. Doubling the debt-to-GDP ratio would be devastating for the economy, which is essentially the situation if the president doesn't take action. The scenarios are: we do nothing and all Social Security recipients receive a 24% cut in benefits, keep borrowing money and double the debt in the short-term, or try to put a sustainable plan into place. The third option has mostly been ignored up until this point. There are honest politicians on both sides of the aisle. Unfortunately, many are not willing to make tough decisions for fear of alienating a portion of the electorate. This exchange indicates that President Biden is opting for a delay strategy, which is bad news for Americans with the majority of their money in tax-deferred accounts. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

David breaks down the 5 biggest IUL mistakes people make and how to avoid them. He starts the conversation by explaining the impact IULs can have on tax-free retirement when used correctly. Mistake #1 - Getting an IUL through the wrong company. David highlights what to look out for before settling on an IUL provider. Mistake #2 - Getting the wrong IUL product. You could have the best carrier in the world, but if you choose the wrong product, it's all for nothing. Mistake #3 - The right advisor. You need an advisor who understands what it means to build a balanced, comprehensive approach to tax-free retirement - and, most importantly, will be in business for the long run. Mistake #4 - Improper funding. David explains that IULs work best when you fund them religiously and keep them until death. Mistake #5 - Making an IUL the only component of your tax-free retirement strategy. According to David, your goal is to make IULs one of four to six streams of tax-free retirement income. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

David sits down with certified financial planner Mark Byelich to discuss how to avoid over-converting your Roth IRA. They start the conversation by describing how over-converting your Roth IRA could sink your retirement plan. According to David, you should execute a Roth conversion if your tax bracket is going to be higher during retirement than it is right now. For stress-free retirement, David believes retirees should constantly think about future tax rates and ways to get to the zero percent tax bracket. David and Mark predict that the Trump tax cuts will likely be extended, but they won't be extended forever. David reveals why the 24% tax bracket is his favorite of all tax brackets. The Social Security Trust fund is projected to run out of money by 2032. David explains how social security benefits would be immediately cut by about 23%. Mark and David break down the Backdoor Roth IRA and instances it makes sense to use it. Mark is convinced the future of Roth IRAs is bright, but people must be careful when converting their money. David explains why life insurance is a great retirement planning vehicle but only when kept for life and used appropriately. LIRPs are a safe and productive way to grow a portion of your money, but they should never replace the stock portion of your portfolio. According to David, the most outstanding part of LIRPs is the death benefit and long-term care coverage. No matter how much money you have in your tax-deferred bucket, the good news is you still have eight or nine years to move your money to tax-free. Mark and David agree that the Roth IRA is the only thing that both the government and everyday Americans love. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker

David sits down with certified financial planner Mark Byelich to discuss why the middle class could soon be paying 45% effective tax rates. When asked what investors should pay attention to in 2023, David says it's now do or die for those looking to take advantage of the Trump tax cuts that are set to expire in December 2025. According to David, the most important thing you can do to help your money last longer in retirement is to pay taxes now at historically low rates. David believes taxes have to double by 2030, or the country might go bankrupt - gone are the days when people could get away with 10 and 12% tax rates. Will the Trump tax cuts be extended past the 2025 deadline? David thinks they will, but there are no guarantees in life. Mark echoes David's comments and says that the Trump tax cuts will be extended no matter who's in office. Mark feels extending the tax cuts is a terrible economic move but a smart political move for those looking to stay or take power. David predicts that when taxes go up, we might end up with 1960-like tax rates where the lowest marginal tax bracket was 22% and the highest was 88%. Mark and David agree that the middle class could soon be paying 45% effective tax rates when tax rates go up. David dissects what eight financial experts are saying about rising tax rates. If you're an investor looking to plan for retirement, David believes your best move right now would be to have at least six streams of diversified tax-free income. Your goal for 2023 and beyond should be to take advantage of everything in the IRS tax code and focus on getting to the zero percent tax bracket. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com Mark Byelich's LinkedIn

David sits down with financial advisor Daniel Rondberg to discuss how to dramatically lower the tax bill on your Roth conversion. They start the conversation by describing why the Power of Zero message is crucial to tax-free retirement. According to David, stress-free retirement often comes down to only worrying about the things you can control. David and Daniel talk about the Power of Zero movie and what gave it great legitimacy. David explains how interest rates can affect your retirement. David reveals why he moved to Puerto Rico and the tax benefits he gets from living in a foreign country. Daniel and David discuss whether it makes sense to pay taxes on Roth conversions using LIRP loans. Thoughts on reverse mortgages and why only 1% of children want to inherit their parents' home. David shares why he is a big fan of IULs and what you can do to get the most out of them. David reveals that 70% of the time, people are motivated to take on LIRPs because they promise to pay for long-term care in advance of a person's death. Daniel and David discuss what happens to unused long-term care insurance benefits if a person never needs the care. Will the family get the money back? Did you know that you could get your social security tax-free for the rest of your retirement if you got yourself to the zero percent tax bracket? Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker

David starts the conversation by describing why it makes sense to have indexed universal life insurance. Did you know that any taxes you pay in your taxable brackets are, ironically enough, optional? David reveals that the ideal amount of money you should have in your taxable bracket is six months of living expenses. Once you've maxed out your IRA, David believes an IUL becomes a great avenue to reposition surplus money into a tax-free investment bucket. David explains that IULs are great because they have no income limitations and no contribution limits. According to David, IULs don't require you to take market risks, so they can serve as a suitable bond alternative with lower risks and higher returns over time. If you're married and over age 60, an IUL makes it possible to get your death benefit in advance of your death for the purpose of long-term care. David highlights the 3 main reasons people hate traditional long-term care insurance: It's getting more and more expensive with time. It's hard to qualify. Something like a bad back can mean you never get accepted. If you pay and die peacefully in your bed, the benefits pay for somebody else's care. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

David starts the conversation by describing the three most important things you should look for in an IUL. All good IULs are sponsored by financially stable insurance companies - but not all financially stable insurance companies offer good IULs. David talks about the four main companies that rank life insurance companies. David explains what a Comdex ranking is and why you should consider it when choosing a life insurance carrier. According to David, the 5 essential attributes of a good IUL are: A guaranteed zero percent loan provision. Interest in areas. Conducts a daily sweep. Has an Overloan Protection rider. Availability of a chronic illness rider. David goes through the three things to look out for when looking for an IUL advisor. If an IUL advisor claims that your IUL can beat the stock market or cannot lose money, run for your life. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

David starts the conversation by describing the difference between a Social Security tax and a Social Security penalty - and whether it's possible to avoid them both. David explains that although some people use them interchangeably, a Social Security tax is different than a penalty. The first step to protecting your Social Security is understanding the main drivers behind taxes and penalties. The Social Security penalty arises when you begin drawing from your account before your full retirement age while also earning above the minimum allowed threshold. David shares how the Social Security penalty works and how the damages can affect your retirement. David breaks down the minimum allowed income threshold and what the IRS counts as earnings. According to David, understanding the IRS's views on provisional income is the best way to learn how Social Security taxation works. David highlights the unexpected income streams the IRS counts as provisional income - some of which might shock you. David highlights situations where up to 85% of your Social Security can become taxable at your highest marginal tax bracket. Even if you reach full retirement, you can continue to pay taxes on your Social Security in perpetuity if you don't keep your provisional income in check. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David debunks the top 3 unsubstantiated claims that pro-life insurance agents on social media make about IULs. David starts the conversation by explaining why we need to be clear on what an IUL is and what it's not. David is a big fan of IULs because he believes they form a crucial part of a balanced and comprehensive approach to tax-free retirement. Claim #1 - An IUL can beat the stock market - a TikTokker even went as far as to claim that there's an IUL that averaged a 15.3% rate of return over a 20-30 year period. David highlights that IULs were not designed to replace the stock portion of your portfolio - plus, there is no way an IUL can average a 15.3% rate of return. A good IUL with a dependable carrier should average somewhere between 6 to 8% over a 20 to 30-year time frame. Claim #2 - You cannot lose money in an IUL. David explains that although you will never be credited less than a zero in an IUL, there is always the risk that your policy could take a hit during a flat year. Claim #3 - The IUL is a silver bullet. No investment path is a true silver bullet. All an IUL does is give you the upsides of the stock market up to a cap with protection on the downside. David reveals that IULs cannot match stock market returns or a 100% guarantee against loss - but they are a fantastic alternative to bonds. According to David, an ideal tax-free retirement approach should have between four and six streams of tax-free income. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David goes through five unique strategies to transform a $1 million inheritance into a tax-free asset. Although a non-qualified inheritance is tax-free, the step-up in the basis rule will lead to a huge tax problem as your asset grows over time. Strategy #1 - Pay the taxes on your Roth conversions. Remember, the worst way to pay taxes on a Roth conversion is on the IRA itself. Strategy #2 - Max out your Roth 401K for you and your spouse. Use your earnings to max out the $60,000 limit for both you and your spouse, and use the inheritance to fund your lifestyle. Strategy #3 - Fully fund your Roth IRA. Not a year should go by when you and your spouse are not fully funding your Roth IRAs. Strategy #4 - Use the inheritance to fund your retirement. If you're already retired, it may make sense to use the inheritance to support your lifestyle instead of going after your IRA. Strategy #5 - Contribute money to a life insurance retirement plan. If you still have some money left after implementing the above four strategies, consider taking advantage of the flexible contribution limits of a LIRP. David explains how you can productively grow your money in a LIRP tax-free. According to David, if you inherit $1 million and leave the money in a taxable bucket, you will be paying taxes over the balance of your lifetime. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Dave Ramsey and other financial gurus claim that indexed universal life insurance(IUL) is expensive and a ripoff. Are they right? Suzie Orman even says you should never work with an advisor that recommends IULs as a possible investment option. According to David, when someone tells you that IULs are expensive, the first question you should ask them is, compared to what? David compares the fees you would likely pay in a traditional tax-free investment versus a lifetime IUL. David explains that judging IUL fees only makes sense if you calculate the expenses over the product's lifetime and not the first 5 years when the fees are the highest. In today's example, David uses a 40-year-old man investing $20,000 a year into an IUL and compares the fees if the same man followed Dave Ramsey's investment advice. In the first year, the man will pay $3502 for the IUL compared to $300 on Dave Ramsey's SmartVestor Pro program - maybe Dave Ramsey was right, after all. However, by the 10th year, IUL expenses will have gone down to $2702, while the SmartVestor Pro will have risen dramatically to $3962. David reveals that it gets worse for the SmartVestor Pro by the 40th year - while IUL fees remain low at $2964, SmartVestor Pro fees will have gone to an astronomical amount of $31,263. This just proves that the expenses of an IUL are higher as a percentage of the balance in the earlier years but are much lower as a dollar amount in the later years. In contrast, David explains that the SmartVestor Pro fees are much lower as a percentage in the earlier years but become much higher as a dollar amount in the later years of the plan. David points out that IULs are meant to replace bonds and not the stock portion of your portfolio, as Dave Ramsey claims. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

What are some of the most outrageous anti-IUL claims on the internet today? David debunks some shockingly misleading claims presented by social media influencer Chris Kirkpatrick. Claim #1: Indexed universal life insurance (IULs) were born from insurance companies wanting to scale down on whole life insurance policies because they could no longer pay guaranteed dividends and needed a new profit center just to break even. This is just false because IULs were a result of the stock market crash of the early 2000's. Insurance agencies created a product that allowed investors to link the growth of their cash value to the upward movement of the stock market index. Claim #2: Insurance companies lure you in with artificially high cap rates, only to reduce them once they've sucked you in. According to David, cap rates change from company to company. However, the one he uses averaged a 7.09% rate of return since 2006 - this is quite impressive considering all the chaos witnessed in the markets during that period. Claim #3: IULs are 100% guaranteed to perform worse than initially promised. This claim is just laughable considering David saw an averaged 7.09 rate of return in the IULs he currently uses. Claim #4: Insurance companies drop cap rates early in the surrender period when the sting of cashing out is the greatest. Yes, surrender charges are harsh in the first 5 years of the policy. However, what Kirkpatrick fails to mention is that this is also the period when it least makes sense to cash out because average rates of return are usually higher - over 7.5%. David admits that IULs are not perfect, but neither are whole life insurances. Kirkpatrick is just a creative agent whose main agenda is to sell you whole life insurance at the expense of an IUL. According to David, when you choose an IUL, you sacrifice guarantees for higher rates of return. In contrast, when you choose whole life insurance, you sacrifice higher rates of returns for guarantees. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

What are Dave Ramsey's thoughts on Indexed Universal Life Insurance (IUL)? David debunks the 5 myths presented in Dave Ramsey's article on why you should run away from IULs. Myth #1: IULs never perform to their full capacity because the cash portion of the portfolio gets eaten up by the super-high fees. Yes, the fees will be higher at the start of the program but will reduce dramatically the longer you keep the policy. In fact, when you average the fees over the entire program, the costs translate to less than 1% of your balance per year. Myth #2: IULs contain numerous fees ranging from surrender charges, administrative charges, premium expenses, etc. David explains that IULs only work if you keep them for life - so fees should only be calculated after the contract expires, which often translates to 1% per year. Myth #3: When you cancel your insurance policy, you give up your death benefit and almost all the cash value you've managed to build. For David, this is by far the most ridiculous of all Dave Ramsey's claims on IULs. Not only is it misleading, but it is actually opposite to how cash-value life insurances work. Myth #4: Excessive fees keep returns relatively low, so your IUL will never beat inflation. This claim is just ridiculous, considering IULs were never designed to be a substitute for the stock market portion of your portfolio. Myth #5: Market performance will affect your premiums - the higher the rates, the more likely you are to lose your policy. According to David, this is a careless and poorly researched claim. Here, Dave Ramsey's primary goal is to lead you to strategically positioned links inviting you to buy term life insurance from him. David believes the only reason Dave Ramsey is against IULs is that he wants you to drop your IULs in favor of his term life insurance policy, with no regard to the losses you might incur or where you are in the surrender period. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

What is ChatGPT? David starts the conversation by explaining what ChatGPT is and the things that make it so revolutionary. ChatGPT is so advanced it has Google worried about its search engine's future. Will the advanced AI chatbot ever replace retirement advisors? David tests the chatbot by asking it a series of questions designed to stretch its basic retirement planning capabilities. When David asks ChatGPT whether tax rates will go up in future, the chatbot replies that it's tough to predict what future tax rates will be - a response David feels is rather "diplomatic." David tries to push the chatbot further by asking it what a life insurance retirement plan is. He is impressed with its answer, which is much more specific and descriptive than what you'd normally find online. After playing around with ChatGPT for over an hour, David believes the AI is not auditioning to replace financial advisors. The even more impressive thing about the chatbot is that its answers are much more balanced and devoid of emotions. Although the technology is not a replacement for financial advisors in the near future, David feels you can still use it to learn more about retirement planning. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Rule #1: Tax rates will go up by 2030. The Fed needs huge sums of money to pay for unfunded obligations, so taxes will have to go up; otherwise, the country will go bankrupt. Rule #2: In a rising tax environment, there is a mathematically perfect amount of money to have in your taxable and tax-deferred brackets. David explains how you can calculate it. Rule #3: Anything above and beyond the ideal balance mentioned above should be systematically positioned to tax-free. Preferably you don't do it all at once, but quick enough to get all the heavy lifting done by 2026. Rule #4: The type of retirement account you contribute to should be determined by comparing your current tax bracket to your future tax bracket. Rule #5: Roth retirement accounts are your best friend. These vehicles allow you to shift nearly unlimited money from tax-deferred to tax-free. Rule #6: It would be best if you did most, if not all, of your heavy lifting before 2026. You have four years before the tax cuts end, and every year you wait to take advantage of these low tax rates is another year you will have to pay more than you need to. Rule #7: The 32% tax bracket is your enemy. Remember, the 32% tax bracket is 33% more than the 22% tax bracket. So try as hard as possible to avoid it when shifting your money to tax-free. Rule #8: Leave some money in your tax-deferred accounts. David explains that if you shift everything to tax-free, you won't have any taxable income left - which means you will needlessly pay taxes on money that you have received tax-free. Rule #9: Make sure your tax-free retirement plan keeps you below the provisional income threshold that can cause social security taxation. In many cases, your money will run out five to seven years faster if your social security is taxed. Rule #10: Never annuitize your retirement in the tax-deferred bucket. Annuities in your tax-deferred bucket will count as provisional income and cause you all sorts of problems. Rule #11: Not all Life Insurance Plans (LIRP) are created equal. And it only makes sense to get an LIRP if you plan to keep it till death. Rule #12: You will need more than one stream of tax-free income in retirement. There is always the risk that the IRS will legislate one of your tax-free streams of income out of existence. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David kicks off the conversation by laying out the 3 basic Life Insurance Retirement Plans (LIRP) and how you can find the best one for your particular situation. For David, an LIRP is like marriage - it's a long-term commitment that you only ever consider if you're willing to keep it until death. If you are looking for absolute guarantees, David explains that no product compares to whole life insurance. The promise to pay a death benefit if the premium has been paid, plus the option of a very stable and safe savings plan, make it attractive for most investors. David points out that the potential to borrow money from a policy is one of the reasons some people buy whole life insurance. However, whole life insurance has its drawbacks. For example, David reveals that unmonitored policy loans can derail your retirement plans or leave you with a significant income tax gain. In the case of Variable Universal Life Insurance (VUL), David explains how the policy has investment subaccounts that allow the insurer to invest the cash value of a policy. Although you may enjoy better-than-average returns with a VUL, your cash value can be significantly reduced due to poor performance of your investment options. The thing that makes Indexed Universal Life Insurance (IUL) attractive is its ability to generate greater upside potential, flexibility, and tax-free gains. However, David explains that the IUL is not designed to be a stock market replacement, nor can you experience the type of return you could get from a VUL. When it comes to ILRPs, David is convinced there is no one perfect solution because all three have distinct attributes. Your job is to find the best one for your situation while protecting yourself against potential downsides. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David kicks off the conversation by revealing that tax rates will revert to where they were in 2017 - you have only four years to take advantage of the historically low tax rates and do a Roth conversion. David explains that most people will try to accelerate their Roth conversion efforts before the 2026 deadline. The problem with this is that trying to accelerate your conversions could bump you into the dreaded 32% tax bracket. You don't have to be a mathematician to realize that the 32% tax bracket is a 33% increase over the 24% - and an unnecessary expense to your Roth conversion strategy. According to David, the 24% tax bracket is the sweet spot in Trump's tax cuts because for an additional 2% on the margin, you can convert an extra $160,000. David points out that the people who accelerate their Roth conversions and end up in the 32% tax bracket will be paying more to the IRS than is absolutely necessary. David explains why the 32% tax bracket is the riskiest region of our current tax laws. David believes the easiest way to get ahead of the 2026 deadline is to extend your Roth conversions past 2026 to 2028 - the three more years will guarantee that you stay in the 22 and 24% tax brackets. Although taxes are going up in 2026, David believes you don't need to move heaven and earth to complete your Roth conversions. As long as you remain in the future versions of the 22 and 24% tax brackets, you will be safe. Regardless of who takes office in 2024, David maintains that Trump's tax cuts will likely be extended, and the taxes for the American middle class will likely stay the same. David explains why the year you should be worried about is 2030 and not 2026 when it comes to the risk of rising taxes. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David starts the conversation by pointing out that more and more financial experts are convinced that tax rates will rise dramatically to pay for unfunded obligations in the future. One way to protect yourself against rising tax rates is to do a Roth Conversion. Taxes will be on sale for another 4 years before they go back to the 2017 highs. If you are serious about retirement planning, David believes you would be wise to take advantage of what he calls "The Tax Sale of a Lifetime." The second way would be to contribute to your Roth 401K. It may make sense for you to stop contributing to your 401K and direct those contributions to a Roth 401K because now is arguably the best time in the history of the US to be making contributions to tax-free accounts. The third point would be to max out on your Roth IRA. As of 2022, you are allowed to contribute $20,500 per year to a Roth IRA and an additional $6500 for catchup if you are above age 50. Point number four is taking advantage of a Health Saving Account. A Health Savings Account allows you to set aside pre-tax dollars to pay for qualified healthcare expenses. Contributions are tax-deductible, grow tax-deferred, and can be distributed tax-free. Last but not least is making contributions to a cash-value life insurance. David explains that Dave Ramsey and Suze Orman may preach against permanent life insurance, but the more experienced financial experts are all for it. A great example is America's IRA Expert, Ed Slott, CPA, who went on live television to declare permanent life insurance as the single most valuable benefit in the IRS tax code. David agrees with Ed Slott that making money from investments is harder than it ever was. The last thing you'd want to do is share your hard-earned gains with the government. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David starts the conversation by describing the changes you can expect from SECURE Act 2.0 and what these changes will mean for your retirement plans. According to David, too many workers retire without enough savings to comfortably live. However, SECURE Act 2.0 may change all of that by expanding coverage, increasing amounts on savings, and simplifying the current retirement system. David explains why SECURE Act 2.0 enjoys broad bi-partisan support. Although SECURE Act 2.0 still has a long way to go before being passed into law, the Senior Vice President of NAIFA, Diane Boyle, said she is "optimistic" the bill will be passed into law in 2022. David highlights how one of the more notable changes in the proposed bill will move the date for required minimum distribution from 70 and ½ to 75. Under current law, if you fail to take the right amount in a required minimum distribution, you will be forced to pay a 50% exercise tax. However, with the SECURE Act 2.0, the penalty gets reduced to 25% and down to 10% if you get everything corrected. David believes, if passed into law, SECURE Act 2.0 will encourage more retirement participation. For the workers still paying their student loans, David reveals how the bill will allow employers to match the amount employees pay towards student loans. Several politicians have expressed the desire to get the bill passed before the end of the year. David believes now is the ideal time to get your affairs in order because some changes will come into effect as early as 2023. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David starts the conversation by explaining why financial gurus like Dave Ramsey and Suzzie Orman hate permanent life insurance. With all the financial information floating around on the internet, who do you follow for advice on where to invest your money? David believes everybody's situation is different, but the best people to follow are the ones who are consistent with their messaging. David calls out The White Coat Investor for misleading people that interest rates won't go up, only for him to change his mind when Biden's tax proposals threatened to raise taxes. According to David, there are two sides to every investment advice on the internet. Instead of stubbornly following one narrative and muting everything else, your job as an investor is to listen to both sides of the story and decide based on your current situation. When meeting with an investment advisor, David believes the least you can do is ask as many questions as possible. There is so much controversy around permanent life insurance because gurus like Dave Ramsey and Suzzie Orman have continuously peddled lies that life insurance doesn't compare well to the stock market and that the expenses are too high - both of which are false. For David, permanent life insurance is like marriage; you should only invest in one if you plan to keep it till you die. Although most financial advisors agree that interest rates will go up, David feels they need to take more action. Believing is one thing, but taking action to mitigate the risk of higher tax rates is a whole different story. When asked what advice he would give to people approaching retirement, David explains they only need to plan for two things - higher taxes and outliving their money. For the younger people who are not that close to retirement, David notes that tax rates will undoubtedly be higher in the future. So now would be a good time to take advantage of all the tax-free savings tools at their disposal. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker

In this episode of The Power of Zero Show, David McKnight talks about what you can do to protect your pension in the current rising tax environment. David explains that tax rates will rise dramatically within the next 10 years due to massively unfunded obligations like Social Security and Medicare. According to former Comptroller General of the United States, David Walker, tax rates will likely double by 2030 to keep the country from bankruptcy. Given the impending doom, David believes it's time we all start to think about protecting our taxable income streams. David highlights that the pre-tax amount on your pension might be guaranteed, but your after-tax amount is not. If you'd like to protect your pension from higher tax rates, David explains the first step would be to consider a lump sum pension distribution option. If this option is available for you, it would be advisable to move as much money into a Roth IRA to shield your dollars from the impact of higher taxes. However, when moving pension dollars into an IRA, David reveals you must move slowly enough so you don't move into a tax bracket that gives you heartburn, and fast enough that you don't get caught up with higher tax rates. David discusses the role of tax-deferred retirement accounts when combating the impacts of rising tax rates. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

In this episode of The Power of Zero Show, David McKnight shares evidence that unless there is immediate and dramatic fiscal realignment by the Federal Government, the U.S. will be mired down in a Great Depression by 2030. Citing Brian Beaulieu, David discusses the role Baby Boomers play when it comes to Beaulieu's prediction of the U.S. undergoing a Great Depression beginning in 2030. David shares that Maya MacGuineas' recent study showed that, just to prevent the debt from growing at a rate in excess of $1trillion per year by 2025, the Government would have to raise taxes on any dollar earned above 400,00 to 102%. David brings David Walker's words into the conversation. According to Walker, on average, Americans pay about 21% of their income to federal taxes, and another 10% to state and local governments. By 2030, to pay the rising bills, that amount could be at least 45%, even higher that the average 42% that most Europeans pay. David talks about a couple of points Brian Beaulieu, David Walker, and Maya MacGuineas seem to be in agreement on: that tax rates will have to go up dramatically by 2030 and that politicians are likely to kick the can down the road. David touches upon what you can do to best prepare for the Great Depression of 2030. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube POZ Video: How High Will Biden Have to Raise Your Taxes? Comeback America by David M. Walker Brian Beaulieu David M. Walker Maya MacGuineas

This episode of The Power of Zero Show addresses the recently-released new contribution limits for the 401(k) in 2023, as well as additional increases in other IRS thresholds. David shares that the IRS just released all their inflation-adjusted numbers for 2023. The biggest surprise is a 9.7% increase in the limits for the 401(k) contributions, which went from $20,500 this year to $22,500 next year. In addition to the contribution limits for the 401(k), the IRS has also increased the catch-up contributions for people over 50. According to David, the Roth 401(k) has become one of the real juggernauts for those looking to build huge amounts of tax-free retirement wealth. David goes over some of the additional changes and increases, as well as their repercussions on single people, married couples, and people over 50. David reiterates the fact that the 24% tax bracket is the single biggest sweet spot in the Trump tax cuts, and goes over what will happen if you aren't going to take advantage of it. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Today's episode of The Power of Zero Show is a segment of an interview David did with financial advisor, Ron DeLegge. They discuss, among other things, whether it's a good idea to convert your Roth IRA while the stock market is down. David shares that there's no such thing as a 0% tax bracket in the U.S. tax tables. Zero describes the condition of someone in retirement who isn't paying tax. Being in the 0% tax bracket doesn't happen by accident, says David. It's the result of planning and proactively trying to have a series of tax-free financial streams that include Roth IRA, Roth Conversions, and some form of Life Insurance Retirement Plan. Dave and Ron discuss the true cost of waiting when it comes to tax rates, and whether it makes financial sense to use the market decline to execute Roth IRA conversions to limit taxes. Having too much risk inside their investment portfolio is one of the big mistakes made by retirees – David explains why that should be a concern for those approaching retirement. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube ETF Guide Video: The Math Behind Roth Conversion Procrastination ProPublica article Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank

Today's episode of The Power of Zero Show addresses the question 'Should the Federal Government get rid of the Roth IRA?' In a recent MarketWatch article, Alicia Munnell, founder of Boston College's Center for Retirement Research, opined that it's time to start thinking about getting rid of the Roth 401(k) and the Roth IRA – and gave three reasons why. Firstly, Munnell believes that Roth IRAs can be hijacked by Congress to pay for expensive partisan legislation. Secondly, she thinks that Roth IRAs should be eliminated because they can turn into tax dodges for high rollers like Peter Thiel. And thirdly, Alicia Munnell makes the case for Roths being an obstacle to fairer tax incentives. According to David, Munnell's points seem to overlook the fact that tax-free retirement instruments like the Roth IRA and Roth 401(k) are some of the only tools Americans have to shield themselves from the impact of higher taxes down the road. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Alicia Munnell's MarketWatch article - Roth IRA and Roth 401(k): the World Would Be a Better Place Without Them Boston College's Center for Retirement Research ProPublica article Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank David Walker

In this episode, David tells the truth about Suze Orman, who's been giving financial advice for the last 25 years and has some pretty black and white positions on most financial subjects. Suze Orman doesn't seem to be a fan of cash value life insurances because of its perceived high expenses. The problem of her approach, according to David, is the fact that it looks at the annual expenses in the early years of the life insurance contract and projects those out over the life of the policy. However, that isn't how things typically work. In real life, the longer you keep your policy, the lower the average internal expenses go. For David, whoever is dealing with a financial advisor recommending that their clients roll their entire IRA into life insurance policies should run the other way. The fundamental issue David sees is the one-size-fits-all financial planning advice dispensed by some mainstream financial gurus. The problem lies in wealthy people not wanting to have a generic financial plan, rather a customized, comprehensive and balanced approach to retirement planning. David calls out mainstream financial gurus like Dave Ramsey, Clark Howard, and Suze Orman for being generalists, instead of experts on specific facets of financial planning. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Suze Orman

David had been skeptical about reverse mortgages and now considers himself a "late convert." Don Graves sees reverse mortgages as a financial planning tool cleverly disguised as a mortgage. Using a football analogy, think of a reverse mortgage as the 11th player on the team (along with income, pension, social security, etc.), which will increase the chances of you winning. Don explains why reverse mortgages should be considered a tax-free stream of income, right along with Roth IRAs, Roth 401ks, Roth conversions, LARPs, and so forth. The idea is that, when you take income by way of a reverse mortgage, it's a true tax-free stream of income. This income does not count as provisional income, thus not counting as a threshold that causes Social Security taxation. Don shares a couple of examples of how reverse mortgages can lead to great outcomes. Don describes the profile of the typical person for whom the reverse mortgage strategy may apply. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube HousingWealth.net [email protected] Ed Slott

David suggests avoiding the shift of everything out of your IRA or 401k into the tax-free bucket because, by doing so, you would then have a standard deduction in retirement that sort of sits idle. $25,900/year is the standard deduction for a married couple. According to David, what you want to do is to be very careful about not converting too much money from the tax-deferred bucket. Most retirement savings are in tax-deferred vehicles, says David. Roth IRAs are the one thing that both consumers and the Federal Government like because they lead to you using after-tax dollars and it gives more revenue to the Federal Government – and it does so today, not in 20 years. For David, the Federal Government has several tools to deal with inflation. Raising interest rates as a possible solution can create a scenario where both interest rates and the cost of servicing the national debt go up. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube The Wealth & Freedom Nexus Podcast David Walker Stephanie Kelton

David's latest book, the 75,000-word novel The Infinity Code, is set to be released on September 27th. David says that the U.S. is facing a math problem of gigantic proportions: they have promised way more than they can afford to deliver in regards to Social Security, Medicare, and Medicaid. The issue is caused by a democratic glitch in the sense that the Baby Boomer generation has far fewer children than their parents had – leading to fewer people putting money into the government programs than those taking that money out. According to several experts, David discusses, tax rates will have to double sooner or later to keep the system working. The problem is that most Americans who are putting money into 401k and IRAs are living in the old paradigm of "putting money into these types of tax-deferred programs to get a tax deduction today, and postpone the payment of those taxes to tomorrow". When people "obsess" over wanting to convert every last dollar in their 401k or IRA to a Roth 401k or Roth IRA, they run into the risk of not having any income left in retirement, would they pay taxes on all those dollars. A standard deduction of $25,900 is all a married couple in the scenario described above may be left with in retirement. David talks about the fact that most people don't realize that their Social Security can be taxed. When they find out, they're mad because it feels like a double tax. David debunks a sort of myth: it isn't true that the same limitations that apply to a normal Roth IRA apply to Roth 401ks and Roth conversions. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Today's episode addresses claims by the likes of Suze Orman, The White Coat Investor, and Clark Howard that financial advisors are a rip-off. After 25 years in the industry, David can say without a doubt that not all financial advisors are created equal. A good financial advisor will increase the likelihood that your retirement savings will last through life expectancy. According to a Vanguard study, tapping into the services of a financial advisor could help you improve your results by as much as 3% points annually. They can do so through three things: 1) By helping you stick to your plan and avoid making emotion-driven investments. 2) By setting you up with a sensible asset allocation that incorporates quarterly rebalancing. 3) Help you keep fees low by guiding you to low-fee alternatives. David talks about the fact that most Americans don't have a CPA and use software like TurboTax or services such as H&R Block to do their taxes. The problem with this is that these types of services are not paid or motivated to advise you on taxes you might pay on retirement distributions 20 or 30 years down the road. CPAs themselves are not very motivated to save your taxes on your 401k IRA distributions, as their main goal is often to help you save on taxes today. David shares three key things a good financial advisor can help you with: 1) to increase the rate of return on your investments. 2) to help you save on taxes at a time when you can least afford to pay them, like retirement. 3) to completely purge longevity risk from your retirement picture. For David, a qualified financial advisor, through sophisticated retirement planning software, can help you anticipate what your tax burden might be years down the road and set up a plan that helps you maximize your after-tax cash flow in retirement. David discusses the Longevity Risk, a situation in which investors go at it alone, seeking to neutralize longevity risk by attempting to follow the 4% Rule. The 4% Rule states that if you never take out more than 4% of your retirement savings in a given year, you have a reasonably high chance that your nest egg will last through life expectancy. The 4% Rule has recently been downgraded to the 3% Rule because some experts believed that the 4% Rule was built around overly optimistic and outdated variables. For David, things aren't as easy as they may appear because of what he calls the "Illusion of Liquidity." Having money sitting around – as per the 3% Rule – can often lead to it being seen as an emergency fund or even a slush fund. Mentioned in this episode: Suze Orman The White Coat Investor Clark Howard Vanguard Are Financial Advisors Worth It? - The Motley Fool (table included) TurboTax H&R Block David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Today's episode focuses on the impact of Joe Biden's student loan forgiveness program on the fiscal trajectory of the U.S.. David shares that Biden's plan has only one stipulation: your annual income must be less than $125,000 as a single person (or $250,000 for a married couple). The program only concerns federal student loans. and you can have up to $20,000 in student loans forgiven if you received a Pell Grant. Otherwise the limit is $10,000. David questions whether Biden could do what he has planned, something that seems to be suggested by David Walker – former Comptroller General of the Federal Government – as well. David quotes Dr. Larry Kotlikoff who touches upon the fact that up to three million Americans over 60 are still paying off their student loans. For the non-partisan Penn Wharton, President Biden's plan includes three major components. They estimated that the debt cancellation alone will cost up to $519 billion, while the loan forbearance will cost another $16 billion, and the new income-driven repayment IDR program would cost another $70 billion. According to Maya McGinnis, President of the bipartisan Committee for a Responsible Federal Budget, Biden's plan will do nothing to actually make education more affordable – meaning that it will likely drive up tuition costs, all while raising prices on a variety of other goods and services for ordinary Americans. Even the Washington Post concedes that the Biden plan will cause tuition to increase more rapidly, primarily due to its income driven repayment IDR provisions. David illustrates how the approach of Biden's plan will encourage students to take out more debt and colleges to charge more in tuition, and how this will impact you as you're trying to get to the 0% tax bracket. Mentioned in this episode: Will the Inflation Reduction Act Raise Your Taxes? This Could Increase Inflation David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Ken Fisher dislikes annuities. He is not shy about it and became controversially famous with his 'I Hate Annuities' campaign. But is his hatred justified? First, Fisher's claims that annuities have 'nosebleed' fees is just wrong. Most of them don't have any fees. The only exception is variable annuities, but the investor gets a guaranteed lifetime stream of income in exchange. Do annuities keep the promise they make to investors? Ken doesn't believe they do. But as David explains, annuities ensure a retiree never runs out of money, which is the one thing retirees fear more than death. When it comes to withdrawing money during retirement, the 3% Rule is one of the most effective strategies you can use today. According to David, Fisher's claims that annuities always mean more taxes is completely false. You can essentially solve all your tax problems by implementing what David calls the Piecemeal Internal Roth Conversion. Fisher argues that annuities do not have a liquidity option. Yes, annuities do have surrender fees, but as David explains, most people don't need liquidity because their investments already guarantee they won't outlive their money. Another of Fisher's issues with annuities is the abnormally huge size of annuity contracts. David counters that claim by saying he's seen dozens of contracts, and they are not as complicated as Fisher paints them to be. Can annuities provide any real value to the average investor? Fisher thinks they can't. David, however, highlights that annuities offer value in ways no other investment vehicle can - your living expenses are taken care of regardless of the market environment, forever. Fisher also maintains that financial advisors are the only people who gain anything from annuities. That's a little disingenuous coming from a person who built a $7 billion business from financial advising. If anything, Ken Fisher is consistent - consistently wrong on all his criticisms of annuities. David further adds that his advice is dangerously misleading and primarily aimed at getting you to transfer your assets over to Fisher Investments. Mentioned in this episode: Financial Fast Lane on YouTube David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Lane Martinsen from Financial Fast Lane interviews David McKnight on why you should use LIRP and the benefits of getting to the zero percent tax bracket. David explains the motivation behind his book The Power of Zero. David reveals why he is convinced that future tax rates will be significantly higher and why it makes sense to be in the zero percent tax bracket in retirement. If you are in or approaching retirement, David recommends taking advantage of the historically low tax rates before the current tax code expires in 2026. According to David, the most effective retirement planning technique combines all available tax-free strategies. Does the 0% tax bracket really exist? David explains how Americans can get into the zero percent tax bracket without trying to game the IRS. David goes through the strategies that can shield you against the risk of a higher tax bracket - and the main components of a comprehensive approach to tax-free retirement. David breaks down what Life Insurance Retirement Plan (LIRP) is and why it's so effective when it comes to tax-free retirement. David reveals the holy grail of retirement planning and what it entails. Numerous studies have shown that the number one concern for retirees is not the risk of paying higher taxes, but the fear of outliving their money. David talks about his second book, Tax-Free Income For Life, and how it can potentially help retirees mitigate longevity and tax rate risk through sane financial planning. David's advice to retirees and people nearing retirement: Rising taxes are inevitable. Don't let a year go by without taking advantage of the historically low tax rates. Mentioned in this episode: Financial Fast Lane YouTube Channel David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

Did Joe Biden just solve the national debt crisis? Here's why you shouldn't be celebrating just yet. David explains why most people believe passing the Inflation Reduction Act might be the first step to taming inflation and curbing the national debt crisis. According to Maya MacGuineas, the President of the Committee for a Responsible Federal Budget, this legislation represents an essential first step toward fixing the debt crisis by enacting several policies related to energy, climate, health care, and the tax code. David points out that Maya is brilliant at what she does, but she might be wrong on this one because the data actually paints a totally different picture. The numbers according to statista.com reveal the national debt is projected to be over 30.6 trillion by the end of 2022 and 43.3 trillion by the end of 2031. David explains that since the Inflation Reduction Act will only save $313 billion over the next 9 years, it does nothing to reduce the current debt. It only slows the growth of the debt by a measly 2.5%. As far as fixing the national debt crisis is concerned, David is convinced that the only way to drive change is to increase revenue and reduce spending. The Inflation Reduction Act will introduce numerous impactful activities that might reduce government spending and solve inflation, but David feels it's not a serious attempt to fix the national debt. As David explains, with the national debt crisis growing into an intractable problem, being in the zero percent tax bracket is now more important than ever. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David breaks down the Inflation Reduction Act of 2022 and how the bill will potentially curb inflation by reducing the deficit, investing in domestic energy production, and promoting clean energy solutions. As far as Biden's Build Back Better Initiative is concerned, imposing more taxes on individuals and couples who make $400k and $450k per year, respectively, is one of the major factors that contributed to the bill not going through. David analyzes whether the inflation Reduction Act will increase taxes for all Americans. David reveals the glaring errors in the proposed inflation act and whether changes to the bill will mean an end to Trump's tax cuts. David explains how Biden's Build Back Better plan would have created an inflationary environment. David demonstrates how the new tax laws are comparable to kings from the past imposing taxes on individuals based on crop yield in a matter that's unfavorable to the farmer. David breaks down the key components of the Inflation Reduction Act of 2022 and how, if passed, might cure the inflation symptoms we're seeing right now. The Inflation Reduction Act will introduce numerous government spending activities. Where will all this money come from? David believes these projects will be funded by more taxes. As David explains, the passage of the bill will, directly and indirectly, affect all Americans, especially since higher taxes for businesses translates to higher costs for the concerned products or services. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David is asked about the pros and cons of the Indexed Universal Life – or LIRP – and what to look for when researching it. As far as LIRPs are concerned, David suggests looking for contracts that are both tax- and cost-free. David discusses some mistakes that some experts such as Dave Ramsey make when talking about 'buy term, invest the difference'. David explains that running out of money before running out of life is one the biggest risks retirees are facing today – and goes over two ways to prevent that from happening. David is asked for his predictions on how the current fiscal trajectory is going to affect housing prices, your bottom line and wallet. David recommends that young people try to be more inclined to contribute to tax-free today due to the fact that taxes are likely going to be higher when they're in retirement compared to what they are at the moment. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David shares that he got into the industry during the "calm before the storm." It was 1997 and, during the State of the Union, President Bill Clinton announced that the national deficit was simply zero. Today, less than 25 years later, the national debt is $30 trillion. By 2010, however, David Walker – former Comptroller General of the Federal Government and a personal hero of David's – appeared on 60 Minutes saying that tax rates would have to double in order to keep the country solvent. 2010 also saw David McKnight starting to go around the country trying to warn and help people, and that's when he developed a presentation, which then turned into his 2014 book The Power of Zero. David explains that there are three basic types of accounts within which you can invest money for retirement and that the first two – the taxable bucket with yearly payments and the one with payments only at the end – are problematic given the rising tax environment. David's focus over the years has been on teaching people how to reposition their money from taxable and tax-deferred to tax-free so that all heavy lifting will be done by the time tax rates increase. All of the experts David interviewed during his documentary shared the same message: "If we don't change the course as a country, tax rates within the next 10 years will have to increase dramatically". Some experts even went further than that, claiming that the U.S. will go broke as a country unless tax rates are doubled. David's main goal is "to put 100,000 people on the road to the 0% tax bracket in the next 10 years". David illustrates the fiscal gap accounting concept and point of view of Boston University's Doctor Larry Kotlikoff, who was featured in the documentary as well. His point of view seems to paint a much more dramatic picture with the national debt standing at $239 trillion. David shares the story of The White Coat Investor, a doctor out of Salt Lake City who believes that David's advice in his book The Power of Zero isn't good advice because "tax-free Roth Conversions are the devil". Despite this, he eventually came around to David's suggestions. For David, the country is facing a completely politically-neutral issue: the maths problem of the U.S.' fiscal problems. David discusses why everyone should look at LIRPs as a valuable tax-free income stream. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

There's this belief among financial experts that life insurance is the financial silver bullet. However, as David explains, that's not 100% accurate. Yes, life insurance can mitigate every retirement risk and solve all forms of retirement problems, but it's never a safe bet when implemented all on its own. A Life Insurance Retirement Plan (LIRP) should not be the only cog in your retirement machine because retirement is all about squeezing as much juice as possible from all available tax-free accounts. David demonstrates how no two tax-free retirement plans are created equal. The people that enjoy stress-free retirement are the ones that strategically take advantage of more than one tax-free retirement account. The first reason you shouldn't go all-in with life insurance is the wisdom of not putting all your eggs in one basket. The sequence of returns risk is the other major reason why it doesn't make sense to retire on LIRP alone. This essentially means a phase when you're forced to take money out of your retirement plan in a down market. David describes how the timing of withdrawals from a retirement account can influence how long an investor's money lasts during retirement. Low returns early in retirement can deplete a retiree's portfolio faster than initially anticipated. Going bankrupt during retirement is detrimental because, if you don't have at least a dollar in cash value to your name, the IRS makes you pay all the foregone taxes up to that point in your life, all in one year. LIRP is not a substitute for the stock part of your portfolio. Its growth is not sufficient enough to stretch your retirement dollars through life expectancy. David explains that if you retire at 65, your money must last for at least another 30 years. The stock market is well suited to such a scenario if structured efficiently. David recommends doing one thing to safeguard your retirement: diversify as much as possible. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube

David shares that the 2022 Trustees Report raises a sharp warning cry about the catastrophic short- and long-term trajectories of the Social Security program. The surplus that had built up over the years as Baby Boomers plowed money into the Social Security program is beginning to draw down as the same Baby Boomers are moving out of the workforce at the tune of 10,000 per day. David talks about the fact that, at the current pace, the trust fund will run out in 2035, and the incoming revenue based on the current levels of taxation would only be enough to pay 80% of scheduled benefits. Historically, Social Security has provided the average retiree with roughly 38% of their average income during their working years – that number should go down to 27% by 2035. This means that Social Security will be playing a smaller and smaller role and that you'll have to save even more of your paycheck in order to compensate. For Social Security to remain fully solved throughout the next 75-year project (ending in 2096) there are three possibilities. David raises a key concern that's brought into the conversation by Social Security Trustees: if Congress acts now, the pain of fixing this program can be spread among Baby Boomers, Gen X'ers, Millennials, etc. However, for each year that goes by without a permanent fix for the Social Security program, the pain will get concentrated on fewer and fewer generations. This means that the longer Congress waits, the higher the taxes these younger generations can expect and the lower their Social Security benefits. David recommends doing two things from a retirement perspective: save money today to be less reliant on Social Security during your retirement, and invest tax-free. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube