The Power Of Zero Show

David gives a 1-minute summary of all his books on retirement. The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement. The book outlines a step-by-step plan for getting to the 0% tax bracket in retirement, because if tax rates double, as some experts predict, two times zero is still zero. Look Before You LIRP: Why All Life Insurance Retirement Plans Are Not Created Equal, and How to Find the Right One for You. David explains that while various LIRPs may help get you to the 0% tax bracket, not all will do so with the same efficiency or effectiveness. In fact, finding the right LIRP for your tax-free retirement plan can be just like finding the ideal spouse. Just as you likely had a list of qualities you were looking for in a life-long partner, you should have certain attributes and provisions in mind when looking for the ideal LIRP. The Volatility Shield: How to Vanquish the 4% Rule & Maximize Your Retirement Income. In this book, David breaks down financial truths that challenge conventional wisdom and reveal the gaping hole in people's retirement picture. He also reveals how you can open a volatility shield account that allows you to pay for your retirement living expenses in the year following a down market. Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement. David lays out a comprehensive, step-by-step roadmap for a secure retirement and how to shield yourself from longevity risk as well as the unintended consequences of higher taxes. The Infinity Code. This book speaks of the evils of the modern monetary theory, which says that we can print an unlimited amount of money to pay for our nation's burgeoning debt load. David shares insights from his upcoming book, Guru. Americans love charismatic gurus who dish out one-size-fits-all financial advice that is easy to digest and implement. However, the dumbed-down financial advice offered by Dave Ramsey and other gurus is good for bad investors but bad for good investors. David believes that while these financial gurus sometimes dispense good advice, it's nearly always at the expense of the best advice. 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 Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker

David reviews an anti-IUL book, LAPSED, written by financial advisor Elan Moas, who believes IULs are designed to fail rather than succeed. According to David, the book is written with dramatic and highly-charged rhetoric around what will befall you if you make the mistake of purchasing an IUL. So the big question is, "Are IULs too good to be true?" For David, IULs do exactly what they're meant to do. Their true purpose is to give you stock market exposure up to a cap with a guarantee against market loss. IULs are not meant to be a stock market alternative. They are a bond alternative with returns of between 5% and 7% net of fees over the life of the program. Insurance companies don't make money on Cap Rates. Cap Rates are a function of two things. First is the cost of options, which is informed by the volatility of the stock market. And second, the carrier's options budget, which is a function of interest rates. David debunks Elan's theory on how IUL providers are intentionally and aggressively working to confiscate your money. David shares a chart showing return rates from real and highly-rated IUL carriers. Only when you see that the author is out to sell you a whole life insurance policy will you understand the motivation behind his misinformed book. David believes the author's goal is to scare people out of their perfectly adequate IULs into a whole life policy that he would be more than happy to facilitate. If you like whole life insurance, great. If you like IULs, great. But please don't waste everybody's time with intentionally misleading scare tactics. 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

Today's episode revolves around whether Dave Ramsey is right – or wrong – in saying that people can take an 8% withdrawal rate in retirement. A group of fiduciary advisors recently confronted Dave Ramsey on Twitter. Just like David, they too thought that Dave Ramsey is living in a fantasy world because of the advice he shares with people. David points out a big flaw in Dave Ramsey's recommendation of staying 100% invested in stocks your entire lifetime: the approach doesn't account for investment volatility. Remember that just because you average 11.8% per year, it doesn't mean that you'll be getting precisely that result each and every year. That's because the order in which you experience returns in retirement is one of the biggest keys in determining whether your retirement assets will last through life expectancy. David emphasizes the fact that most people who retire at age 65 need their money to last a full 30 years. Ramsey's "one-size-fits-all" approach is the reason why, David believes, he takes positions even if they aren't supported by the data. 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 Dave Ramsey Morningstar Ibbotson Associates Debunking the Myth of the 8% Return by Wade Pfau

David starts the conversation by describing why he's not a huge fan of Doug Andrew's retirement philosophy. David then talks about the differences between Doug's approach and the Power of Zero approach for funding your retirement. According to Doug, you risk jeopardizing your retirement if you have money in an IRA or a 401K. There's the danger of losing a sizable portion of your portfolio if the markets were to crash like they did in 2008. To protect your retirement, Doug believes it would be best to move all your money in the stock market into a Laser Fund/Indexed Universal Life Insurance. David interprets this to mean that Doug dislikes stock market investing. For David, the stock market is the single greatest engine of wealth creation the world has ever seen. What about risks and volatility? David explains that the longer you invest in the stock market, the more likely you won't lose money and grow your assets over time. David prefers a retirement strategy that views the IUL as one component of a balanced, comprehensive approach to tax-free retirement. David reveals why the Roth 401K is an extremely useful tool for funding tax-free retirement. David shares what his preferred tax-free investment strategy would look like - and why the zero percent tax bracket is so powerful. David goes through the 3 things that make IULs a unique tax-free investment route: A death benefit that doubles as long-term care. Serves as a great volatility shield in retirement. Safe and productive returns. Also functions extremely well as a bond alternative. If you believe tax rates will be higher in the future than they are today, you should adopt a strategy that takes advantage of all the benefits in the IRS tax code. 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

David starts the conversation by breaking down his book, Power of Zero, and the problem with America's ever-rising national debt. For David, the goal of the book is to guide people on how to move their assets into tax-free retirement vehicles - and how such a move is the only way to shield yourself from potentially higher tax rates in the future. David describes the difference between LIRPs and other life insurance products. All LIRPs are life insurance policies, but not all life insurance policies are LIRPs. David reveals why he believes HSAs(Health Saving Accounts) are the holy grail of financial planning - you get a deduction on the front end, let that money grow tax-free, and then take it out tax-free. Can you have too much money in your 401K? Yes. You want to ensure the balance in the IRA is low enough that RMDs (when you are finally forced to take them) are equal to or less than your standard deduction and low enough that they don't cause Social Security taxation. You can have a million dollars in your IRA, but unless you can accurately predict what tax rates are going to be in the year you take that money out, you don't really know how much money you have. David reveals why many financial planners detest tax-free investing. Life insurance is not a silver bullet for tax-free retirement. It only works as a complement to other tax-free streams of income. Is it a no-brainer to get life insurance? David believes it's not. It depends on your situation. Always remember that the IRS is looking at how much money you withdraw from your IRA and 401k. If you take out too much, they'll tax a portion of your social security. David talks about the benefits of having 4 to 6 different streams of tax-free income. According to David, we are in the tax sale of a lifetime because taxes in the next three years will never be as low as they are today. 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 Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker

David starts the conversation by describing why he believes Dave Ramsey is wrong about Fixed Indexed Annuities. In a recent live call, Dave Ramsey revealed why he is not a fan of annuities and what you should consider doing instead. Dave Ramsey's thoughts on Fixed Indexed Annuities - They have a floor that cannot go below a specific number, say 6%. Fees are double what you might get in a mutual fund and the advisor commissions are four times as high. David's response to Dave Ramsey's thoughts on Fixed Indexed Annuities. Indexed annuities don't have a 6% floor. If an index ever goes down in a given year, they simply credit you a zero. The floor is zero percent. Technically speaking, Fixed Indexed Annuities don't have fees. You cannot lose money to fees or end up with less than your original contribution. David goes through the benefits of investing in Fixed Indexed Annuities. One of the dangers of being a financial guru is you have to project to your listeners that you're an expert on every financial topic. For David, fixed Indexed Annuities are not a stock market alternative. They're a bond alternative. David believes that if you're a disciplined investor and want to purge longevity risk from your retirement picture, you should consider Fixed Indexed Annuities. It's clear that Dave Ramsey knows far less about annuities, and it's troubling that he consistently gives investment advice on subjects he's not familiar with. 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

David starts the conversation by describing how a financial guru, Derek Sall, allegedly lost $400k in an ill-advised Roth conversation. According to Sall, you're way more likely to have a lower income in retirement than you have today, so you'll likely be in a lower tax bracket in the future. But as we all know, tax rates must go up as early as 2026 to pay for unfunded government obligations. David made 3 observations to counter Derek's claims: Your income in retirement is not likely to be way lower than it is today. This is one of the huge myths foisted on a generation of baby boomers. The single largest factor that should determine whether you do a Roth conversion is whether you believe the taxes you pay will be higher now than in the future. You're not necessarily guaranteed to be in a lower tax bracket in retirement. More and more experts are beginning to predict that tax rates in the future will have to rise dramatically to pay for unfunded obligations. David explains that Derek might have unknowingly made a wise financial decision by making a Roth conversation at the 22% tax bracket. You should always consider doing a Roth conversion, especially when young. Chances are, you will make a lot of money in your later years, so it makes sense to pay taxes now since taxes will likely go up in the future. For David, Derek Sall did not make the wrong move by converting his 401K into a Roth. In fact, he didn't go far enough. He should have taken advantage of the 24% tax bracket as well. David reveals whether there are certain times it doesn't make sense for some people to do a Roth conversation. 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

Jeremy Schneider is a financial guru who claims to have retired at the age of 36 with four million dollars. He recently shared an anecdote about a young millionaire who owned around $90,000 in cash value life insurance. The reaction of the host was quite interesting, as none of the other millionaires interviewed for the show brought up life insurance as a means of building or holding their wealth. If you scroll around on social media though, there is a huge number of financial gurus recommending investing in Indexed Universal Life Insurance because of lax legislation that allows the conflation of the insurance product as an investment vehicle. The trouble with Jeremy's dismissal of the IUL product is that he fails to distinguish between the deceptive practices of unscrupulous insurance salesmen and the product itself. He also makes the incorrect comparison by saying indexed funds outperform the IUL over time, but that's like comparing stocks to bonds. They aren't the same thing. If he were to acknowledge that IULs had a proven track record of between 5%-7% net of fees over time without taking any more stock market risk than you are accustomed to in your savings account, then he would undermine his anti-IUL narrative. His gimmick only really works when he compares the IUL to a portfolio entirely composed of stocks, but when you consider bonds, an entirely different narrative emerges. Jeremy Schneider also fails to acknowledge the reason that 70% of all people over the age of 50 buy the IUL is for the long-term care advantage. IUL plans with a chronic illness rider give you the opportunity to access up to 25% of your death benefit to pay for long-term care. In the event you die without ever having the need to use the long-term care coverage, your heirs still get the death benefit, so there isn't that sensation of paying for something you hope you never have to use. As for his claim that no financial advisors would ever recommend an IUL, there are a number of experts and advisors that support the recommendation of the IUL. Ed Slott, America's IRA expert, is a big fan of cash value life insurance as a part of retirement planning. What Jeremy is really addressing is the number of financial gurus on TikTok claiming that historically only the rich used cash value life insurance to build their wealth. The narrative is clearly false, and it's important to realize that the IUL is not in competition with stock market investments and has some unique features that make it an attractive compliment to tax-free investment strategies. For almost all the millionaires mentioned, there is a case to be made for the IUL in their retirement strategies. 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

Regardless of your age, proximity to retirement, or financial profile, Dave Ramsey recommends the exact same investment allocation: divided equally among four types of funds; growth, growth and income, aggressive growth, and international. Dave's philosophy essentially boils down to investing in the stock market. The Money Guy show did a recent comparison between the Ramsey portfolio and the S&P 500. When the overall market was performing well, they both fared similarly, but the worst periods were considerably worse for the Ramsey portfolio because it's inherently more risky without the surplus returns that would justify the extra risk. The S&P 500 outperformed the Ramsey portfolio in the last 1 year, 3 year, 5 year, and 10 year time periods. Another glaring error is that the Ramsey portfolio does not contain bonds, no matter how far you are from retirement. One tried and true investment approach is to take your age and subtract it from 100. That's how much you should be allocating to the bond portion of your portfolio. Data supports this approach, but Dave feels they don't perform as well as stocks. When examined closely, the statistics don't support that conclusion. The Money Guy show did another comparison showing that the two different approaches have very different results. A 60/40 portfolio doesn't have the highs of an all-stockportfolio, but the lows are where the real risk lies. A bond portfolio ends up taking less risk but earning a greater return over a 22-year timeframe. If you are relying on your investments to support you in your golden years, one bad year in the market can completely derail your retirement. A 100% stock market portfolio exposes you to sequence of return risk that could send your retirement portfolio into a death spiral that it can't recover from. Dave Ramsey's might have some merit if he didn't unequivocally advise against guaranteed lifetime income annuities. With a bit of planning, an annuity when paired with a company pension and Social Security can completely cover your living expenses in retirement. This allows you to earmark your stock market portfolio for extra expenses and also take more risk in the stock market portion of your portfolio. With your lifestyle needs taken care of with this method, you could even remove the bond portion of your portfolio. By allocating 100% of your portfolio to higher yield stocks, you dramatically increase the likelihood your portfolio will last through your life expectancy. Dave Ramsey's one-size-fits-all anti-bond investment approach is contradicted by years and years of academic studies and empirical data. The question is why? The unfortunate truth is that as a financial guru, Dave Ramsey does not have the luxury of nuance and has to dispense one-size-fits-all advice. 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 Come Back America by David Walker

The national debt is fast approaching $32 trillion dollars, nearly double from only a few short years ago. Neither parties are blame-free for the situation we find ourselves in as of 2023. That $32 trillion does not include the unfunded liabilities and obligations that we will be paying for over the next ten years. We got to this point without including the added costs of Social Security, MediCare, and Medicaid. Politicians are facing a situation where they either cut those programs, which is a surefire way to get kicked out of office, or dramatically raise taxes. David Walker predicted that effective tax rates for Americans will rise to 45% by 2030. Right now, the effective tax rate for Americans on average is only 18%. Rising tax rates aren't just speculation, it's in the tax code. The tax rates are scheduled to rise already unless the law is altered. In 2026, the steps between tax rate tiers are going to get much less steep. The trust fund for MediCare is scheduled to go bust by 2027. The trust fund for Social Security is scheduled to go bust in 2032. Many people think we can print our way out of our problems, but that's not going to work with entitlement programs. Rising inflation due to printing money will ensure that we never really catch up with the problem. Historically, the highest tax rate in America was 94%. There is historical precedent for both raising taxes dramatically and cutting expenses. The trouble is that politicians haven't had the backbone in the past to deal with these issues before they become crippling to the economy and average Americans. Further trouble is due to the different circumstances in how we spend money. Unlike in the past, the debt-to-GDP ratio is worse and we are living beyond our means by a considerable margin. We are spending money like drunken sailors and there doesn't seem to be any willpower in Washington to change the direction. Politicians also have the tendency to avoidtelling people what they really need to hear. The Power of Zero strategy is basically the idea of systemically positioning your retirement savings to the tax-free bucket and protecting yourself from the ebb and flow of future tax rates. We could see tax rates rival the 1970's. The Trump Tax Cuts are the tax sale of a lifetime. Most people that David works with are good at saving and find themselves in the 22% tax bracket. By converting up to the 24% tax bracket, those people have much better odds of converting the majority of their savings to tax-free before tax rates rise, possibly for good, once 2030 comes around. 2026 is an important date, but not as important as 2030. People should take advantage of historically low tax rates while they are still around and get their houses in order by 2030. It can be especially challenging for widows in retirement when you factor in how the loss of a Social Security payment can impact cash flow and taxes. Recent changes to inheritance laws are also making legacy planning more difficult. If you delay required minimum distributions from an IRA, there's a good chance you can end up paying way more in taxes than expected. Now is the time to look at your tax plan. The antidote to all these issues is the Roth Conversion. If you die and your spouse inherits your Roth IRA, whatever the tax rates are at the time will no longer be an issue. Roth Conversions aren't the silver bullet. There are other strategies within the Power of Zero that allow you to truly reach the zero-percent tax bracket. Things like the Life Insurance Retirement Plan, Roth IRAs and 401(k)s, annuities, and multiple streams of tax-free income. 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 Come Back America by David Walker 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