The Power Of Zero Show Expert Warns Your Effective Tax Rate Could Double by 2030
Today’s episode is part 1 of David’s appearance on Jesse Wright’s podcast.
Jesse asks David where one should start from when thinking about retirement.
David points out that the types of accounts which one saves money for retirement really matter.
According to David, there’s essentially two ways to save money for retirement.
The first is to get a tax deduction today.
The second is to pay the tax today and invest your money so that, in the future, you’ll be able to take that money out tax-free.
David goes over why he wrote The Power of Zero back in 2014.
One key question David believes people should ask themselves is whether their tax rate is likely to be higher today or in 20 years.
For Former Comptroller General David Walker, the 20% of the income Americans are paying between federal, state, and local taxes, could go up to 40% by 2030.
David believes that the farther out your investment horizon and retirement date, the more critical it is for you to invest in tax-free accounts like Roth IRAs, Roth Conversions, etc.
David recommends planning for 50% tax rates and explains that there are three basic types of account to save money for retirement.
These three buckets are: the so-called taxable bucket, the tax-deferred bucket, and the tax-free bucket. David goes over the characteristics of each bucket.
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
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 Walker