David McKnight addresses Doug Andrew’s recommendation of turning your IRA into an IUL. David agrees with some of Andrew’s views, including his objection to rolling a 401(k) into an IRA, and then leaving it there until you die. Given the exploding national debt, most experts predict that taxes 10 years from now will have to rise dramatically to keep the U.S. solvent… Doug Andrew lists Indexed Universal Life as his “favorite financial vehicle because of liquidity, safety, predictable rates of retu...
Jul 02, 2025•10 min•Season 1Ep. 348
This episode of The Power of Zero Show revolves around a recent Ray Dalio video in which he issued warnings about the U.S. debt crisis. In the clip, Dalio appears to be giving America three years to get their act together and to right the fiscal ship of state. Dalio mentions the draft of his new book that goes through the mechanics of the debt – and highlights the supply-demand problem he believes will occur if the deficit doesn’t go from the current 7.2% of GDP to about 3% of GDP. Dalio touches...
Jun 25, 2025•11 min•Season 1Ep. 347
David McKnight looks at why many people wait until the fourth quarter to do a Roth conversion, the potential penalties, and what can be done to avoid having to pay underpayment penalties to the IRS. David begins the episode by highlighting the fact that a lot of investors wait until Q4 before they do a Roth conversion – and they prefer to pay taxes on it in cash instead of simply having the taxes withheld by the IRS. From a mathematical standpoint, it’s the correct thing to do because it allows ...
Jun 18, 2025•6 min•Season 1Ep. 346
In today’s episode, David McKnight focuses on whether you should do a Roth conversion, how much you should convert per year, and whether it’s possible to over-convert to Roth. David explains that an effective tax rate is the actual percentage of your income that you pay in taxes after accounting for deductions, exemptions, and credits. For David, the only reason you should do a Roth conversion is if you believe that your effective tax rate in retirement will be higher than your marginal tax rate...
Jun 11, 2025•8 min•Season 1Ep. 345
David McKnight looks at Target Date Funds (TDFs) and why their set-it-and-forget-it approach to investing is NOT something you should rely on. David kicks things off by explaining how TDFs work, including why they tend to be a popular option for novice investors. While it sounds like an excellent approach, David points out two major flaws. “A lot of the problems with TDFs come down to sustainable withdrawal rates in retirement,” says David. The 4% Rule consists of you being able to withdraw 4% o...
Jun 04, 2025•8 min•Season 1Ep. 344
In this episode of the Power of Zero Show , host David McKnight discusses the scenario in which you have maxed out your 401(k) and are wondering where you should invest the rest of your money. The episode kicks off with David addressing the type of 401(k)s you should be investing in first. There are two types of 401(k)s: the traditional pre-tax 401(k) and the Roth 401(k). Should you go for a traditional 401(k) or a Roth 401(k)? It all depends on whether you think your tax bracket is likely to be...
May 28, 2025•8 min•Season 1Ep. 343
In this episode of the Power of Zero Show, host David McKnight addresses the claim that sees Paul Atkins owning 54 life insurance policies for an astounding 10% of his $327 million net worth. Someone may ask themselves why someone with such a massive net worth would own so many life insurance policies…and even why someone who has equity in Chinese tech giant Alibaba, holdings in cryptocurrency, and stakes in venture capital firms would also want their wealth growing in cash value life insurance ...
May 21, 2025•8 min•Season 1Ep. 342
In this episode of the Power of Zero Show, host David McKnight looks at every possible tax or cost that may result from a Roth conversion. The first tax you’ll have to pay when executing a Roth conversion is federal income tax. Whatever portion of your IRA you convert to Roth is realized as ordinary income and piled right on top of all your other income. David is an advocate for not converting to Roth unless you think your federal tax rate in retirement is likely to be higher than it is today. T...
May 14, 2025•11 min•Season 1Ep. 341
This episode of the Power of Zero show explores whether you should be taking more risks in your Roth accounts than in your other investments. Host David McKnight kicks things off by stating that if you have Roth IRAs or Roth 401(k)s in your portfolio, you should be allocating 100% of these dollars to a stock allocation. That’s because these are your most tax-efficient investments and they’ll remain tax-free right up until your death – and even 10 years beyond. Remember: you want the biggest retu...
May 07, 2025•7 min•Season 1Ep. 340
In this episode of The Power of Zero Show , host David McKnight looks at Doug Andrew’s recent video in which he implored his audience to never use a Roth IRA or a Roth 401(k) again. Andrew sees Indexed Universal Life insurance (IUL) as far superior and believes it should be the source of the vast majority of your distributions in retirement. While David likes IUL in certain circumstances, he isn’t a fan of sales strategies that debase every other viable tax-free alternative in an effort to exalt...
Apr 30, 2025•12 min•Season 1Ep. 339
What percentage of your retirement savings should you allocate toward traditional IRAs and 401(k)s vs. Roth IRAs and Roth 401(k)s? That’s what this episode explores. Traditional financial guru advice says that it’s impossible to predict where tax rates are going down the road. Therefore, you may hear that your best bet is to simply have 50% of your money in tax-deferred and 50% of your money tax-free. David is somehow perplexed by the guru’s point of view about the future of tax rates being an u...
Apr 23, 2025•7 min•Season 1Ep. 338
David McKnight goes through his five cardinal rules for doing a Roth conversion. The first principle is simple: don’t do a Roth conversion that bumps you into a tax bracket that gives you heartburn. Not sure about what a heartburn-inducing tax bracket looks like? David shares a simple “rule of thumb” you can follow. In your zeal to get your Roth conversion done before tax rates go up for good, don’t bump into the 32% tax bracket along the way. The second cardinal rule ties into the almost certai...
Apr 16, 2025•8 min•Season 1Ep. 337
Wondering when you should start thinking about a Roth conversion? That’s exactly what David McKnight dives into in this episode of The Power of Zero Show . The retirement valley is that dip in taxable income that happens after you retire but before RMDs kick in – at age 73 or 75, depending on your birth year. David walks through an example: you’ve got $2 million in your IRA and want to convert all of it to Roth. If you take action during that valley, you can convert more while staying in the 24%...
Apr 09, 2025•6 min•Season 1Ep. 336
David McKnight addresses the most efficient order in which to spend your assets in retirement. Online programs and algorithms that forecast and run calculations related to your retirement assets suggest starting with your tax-deferred assets like 401(k)s or IRAs. Such tools recommend spending down your tax-deferred assets now, when tax rates are low, and your tax-free assets later – when tax rates are likely to be higher than they are today. Reminder: regardless of the distribution strategy you ...
Apr 02, 2025•7 min•Season 1Ep. 335
Today’s episode of The Power of Zero Show looks at a recent podcast episode in which Suze Orman recommended having three to five years of living expenses in cash during retirement. Experts have long debated the rate at which retirees can draw down their assets while maintaining a high likelihood of not running out of money before they die. Since the early ‘90s, the gold standard for sustainable distributions has been the 4% Rule. According to the 4% Rule, whether the market goes up or down, you ...
Mar 26, 2025•11 min•Season 1Ep. 334
Today’s episode addresses five reasons why a Roth IRA is one of David KcKnight’s favorite tax-free investments. Unlike other retirement accounts, Roth IRAs give you 100% liquidity on all contributions. While David isn’t necessarily suggesting that you use your Roth IRA as an emergency fund, it’s nice to know that you won’t have to wait until age 59 ½ to be able to access those funds. If you happen to take out your Roth IRA contributions, you can put that money back within 60 days as long as your...
Mar 19, 2025•7 min•Season 1Ep. 333
This episode of The Power of Zero Show is part of David McKnight’s podcast interview with Caleb Guilliams and Tom Wall, PhD. David touches upon a recent Ernst & Young study where whole life insurance was used as a buffer-type strategy. When it comes to the “risk continuum”, David sees IUL as slightly on the right side of whole life insurance. IUL is something worth doing only if you think that risk premium can get you a slightly higher rate of return over time. David recognizes that IUL has ...
Mar 12, 2025•15 min•Season 1Ep. 332
Today’s episode of The Power of Zero Show features part of David McKnight’s conversation with Caleb Guilliams and Tom Wall, PhD. David kicks things off by addressing the liquidity issue. Handing a chunk of your retirement savings over to an insurance company in exchange for a stream of income that’s guaranteed to last as long as you do sounds great in principle, but people often have consternation about it… The thought of losing liquidity on a significant portion of their net worth is what preve...
Mar 05, 2025•5 min•Season 1Ep. 331
This episode of The Power of Zero Show is part of David McKnight’s conversation with Caleb Guilliams and Tom Wall, PhD. David touches upon the “dangerous partnership” between the American people and the IRS. David is an advocate for a balanced, comprehensive, approach to tax-free retirement – he explains why that’s the case. One of the things David likes about IULs is the fact that they can perform specific applications that no other stream of income, such as Roth IRAs and Roth 401(k)s, can do. ...
Feb 26, 2025•15 min•Season 1Ep. 330
In this episode of The Power of Zero Show , David McKnight addresses different strategies for tax-free retirement planning in 2025. Most Americans are a little nervous when it comes to the fiscal trajectory of the U.S.. According to expert forecasts, the likely extension of the 2017 Trump tax cuts would take the current $36 trillion of national debt beyond the estimated $54 trillion by 2034 – taking it all the way to $59 trillion. A recent Penn Wharton study predicts that if the U.S. doesn’t rig...
Feb 19, 2025•11 min•Season 1Ep. 329
David McKnight discusses a couple of really good reasons for doing a Roth conversion when you’re expecting a pension in retirement. David sees the American tax system functioning in a similar way as a graduated cylinder. Your income goes in and flows all the way down to the bottom. Some of your money gets taxed at 10%, at 12%, 22%, some at 24%, 32%, at 35%, and some at 37%. Jeff Bezos, too, has some of his earned income taxed at 10% (only for about 3 seconds, though!). If you’re planning on rece...
Feb 12, 2025•7 min•Season 1Ep. 328
This episode of the Power of Zero Show sees host David McKnight address Dave Ramsey’s advice – inviting a member of his audience to fire his tax advisor for recommending a 401(k). The problem with “financial gurus” like Dave Ramsey and the call-in shows they host is that they provide one-size-fits-all prescriptions that are delivered in very stark black and white terms. While David is an advocate for accumulating money in tax-free retirement vehicles, he also recognizes the importance of nuance ...
Feb 05, 20250•Season 1Ep. 327
Today’s episode is a podcast guest interview David McKnight did for Josh Jalinski’s The Financial Quarterback Podcast . David gives Josh’s audience a quick bio that spans from his early days in the financial services space in 1997 all the way to his latest book The Guru Gap . The premise of The Guru Gap is the difference between the 1990s when people had very few options to vet out financial planning advice and today, where they have plenty of ways to vet out. Nowadays, whenever David makes a fi...
Jan 29, 2025•1 hr 4 min•Season 1Ep. 326
David McKnight takes a closer look at Suze Orman’s take on annuities – and at why she recommends her audience avoid them at all costs. Suze Orman labels the 5.4% compounded annual rate of growth one of her audience members (Janet) has had over the last six years as “horrific in today’s market.” David believes that the main issue with Suze Orman’s approach is that it engages in a classic case of apples to oranges comparison. According to David, index annuities are a bond alternative and were neve...
Jan 22, 2025•9 min•Season 1Ep. 325
This episode looks at whether you qualify or not for the $200 billion Social Security benefits approved by the U.S. Congress. Host David McKnight shares that, with the current status quo, the Social Security Trust Fund is on pace to go bust by 2033. If that were to happen, only about 83% of benefits would be paid out… If signed into law by President Joe Biden, the Social Security Fairness Act would provide an additional $200 billion in Social Security benefits to nearly 2.8 million Americans ove...
Jan 15, 2025•6 min•Season 1Ep. 324
In this episode, host David McKnight tackles a question about the tax bracket at which you should stop contributing to the Roth IRA and start contributing to the traditional IRA. The inspiration for this episode was a recent episode of The Money Guy Show . David believes that advice such as that shared on The Money Guy Show doesn’t consider most of the people asking questions like the one addressed in the episode. Those are people whose combined marginal tax rates fall between 25% and 30%. Gener...
Jan 08, 2025•7 min•Season 1Ep. 323
David McKnight looks at a recent study on retirees that seems to tell a different story compared to what many people in the U.S. tend to believe. Americans often view guaranteed lifetime income annuities skeptically – they’re perceived as a drag on the growth of their stock market portfolio. According to the study by retirement researchers David Blanchett and Michael Finke, retirees with guaranteed lifetime income spend about twice as much as their counterparts who rely on stocks and bonds alone...
Jan 01, 2025•6 min•Season 1Ep. 322
The episode explores whether the proposed Department of Government Efficiency (DOGE) will move the needle when it comes to the U.S. debt crisis. Some people see DOGE as the bold move America needs to solve its looming debt crisis. Elon Musk believes that DOGE can rip out at least $2 trillion out of the $6.5 trillion Biden-Harris budget – however, David McKnight disagrees. David gives a breakdown of the federal budget, including the so-called non-discretionary spending. Former U.S. Comptroller Ge...
Dec 25, 2024•6 min•Season 1Ep. 321
The episode kicks off with David McKnight sharing his view of the guru’s approach: “to go about half an inch deep and ten miles wide.” David discusses a sort of clash that financial planning gurus are creating by trying to attract — or even 'steal' — clients from financial planners who already have them. The goal of financial planners should be to provide a bridge between the advice clients get from financial gurus and their ultimate objective of ensuring that their money lasts as long as they d...
Dec 18, 2024•8 min•Season 1Ep. 320
This episode is based on David McKnight’s interview with Lane Martinsen on Financial Fast Lane. David shares how he started in the financial planning industry, as well as the backstory of his new book, The Guru Gap . The Guru Gap focuses on several financial gurus such as Dave Ramsey, Suze Orman, Clark Howard, and Ramit Sethi. David finds it interesting to see financial gurus demonizing the types of recommendations him and his peers share – recommendations based on math and actuarial science. Fo...
Dec 11, 2024•29 min•Season 1Ep. 319
