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. Dav...
Mar 08, 2023•32 min•Season 1Ep. 227
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 becaus...
Mar 01, 2023•9 min•Season 1Ep. 226
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...
Feb 22, 2023•13 min•Season 1Ep. 225
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...
Feb 15, 2023•9 min•Season 1Ep. 224
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 ove...
Feb 08, 2023•9 min•Season 1Ep. 223
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 yo...
Feb 01, 2023•10 min•Season 1Ep. 222
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 ju...
Jan 25, 2023•10 min•Season 1Ep. 221
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 ...
Jan 18, 2023•14 min•Season 1Ep. 220
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 transla...
Jan 11, 2023•17 min•Season 1Ep. 219
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 w...
Jan 04, 2023•12 min•Season 1Ep. 218
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 ...
Dec 28, 2022•13 min•Season 1Ep. 217
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 s...
Dec 21, 2022•13 min•Season 1Ep. 216
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 br...
Dec 14, 2022•9 min•Season 1Ep. 215
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 w...
Dec 07, 2022•12 min•Season 1Ep. 214
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 ...
Nov 30, 2022•9 min•Season 1Ep. 213
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 ...
Nov 23, 2022•19 min•Season 1Ep. 212
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 tim...
Nov 16, 2022•8 min•Season 1Ep. 211
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 i...
Nov 09, 2022•8 min•Season 1Ep. 210
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 co...
Nov 02, 2022•7 min•Season 1Ep. 209
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 proact...
Oct 26, 2022•11 min•Season 1Ep. 208
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 IR...
Oct 19, 2022•7 min•Season 1Ep. 207
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. Howeve...
Oct 12, 2022•12 min•Season 1Ep. 206
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,...
Oct 05, 2022•32 min•Season 1Ep. 205
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...
Sep 28, 2022•14 min•Season 1Ep. 204
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 tha...
Sep 21, 2022•15 min•Season 1Ep. 203
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 ...
Sep 14, 2022•10 min•Season 1Ep. 202
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...
Sep 07, 2022•8 min•Season 1Ep. 201
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 ensu...
Aug 31, 2022•11 min•Season 1Ep. 200
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 ...
Aug 24, 2022•18 min•Season 1Ep. 199
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 c...
Aug 17, 2022•8 min•Season 1Ep. 198
