The Power Of Zero Show

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

Learn about the importance of evaluating financial stability in an indexed universal life (IUL) carrier, the challenges of interpreting company rankings, and the five essential attributes of a good IUL. Discover important provisions for IUL policies, such as over loan protection, interest in arrears versus interest in advance, and daily sweeps for growth potential. Find out how to choose the right IUL carrier, product, and advisor, and why death benefits and avoiding unrealistic claims are important considerations.

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