The Power Of Zero Show

George Kamel recently released a video on index universal life. On the surface, it looks like a ruthless exposé of a financial scam that millions of Americans are falling for.  But when you scratch just below the surface, his critique of IUL is a steaming cesspool of half-truths and outright lies that are designed to sell you a term insurance policy through a Dave Ramsey-sponsored term insurance broker. According to Kamel, the IUL is a financial scam marketed as a secret wealth hack, yet in reality, it’s a money-eating monster. Yes, IULs are marketed by pretty scammy people on social media. However, there is a big difference between scammy life insurance agents and scammy life insurance products. IUL products are not created equal. It all depends on your personal situation and needs. Some products can be fantastic tools for building and protecting wealth and others can be catastrophic to your retirement.  For David, not only does the IUL serve as an extremely competitive bond alternative, but it’s also a great volatility buffer in retirement. Financial gurus are not in the business of nuance. It’s all about making sweeping black-and-white characterizations that fit neatly into their tiny box. According to David, recent studies demonstrate that bonds are much more volatile and much more correlated to the stock market than was previously thought. David explains that fees are only a problem in the absence of value. And when utilized in the right context, an IUL provides value that you simply can’t get any other way. David explains how the IUL fees are a strength and not a liability that the uninformed life insurance critics make it out to be.  When George says that the IUL is a money-eating monster, he’s only fixating on the fees in the early years of the contract. If he were to look at the average fees over the life of the program, a much different picture would emerge--one that paints the IUL as lower than the most cost-effective 401K plan.  David goes through the things George gets wrong about the death benefit options in an IUL.  The entire purpose of George’s video is not to educate you on the evils of an IUL. It's to get you to buy a term life insurance policy through Dave Ramsey’s endorsed broker of choice.  George's ultimate goal is to get you to take the money that you might otherwise have allocated towards an index universal life policy and redirect it towards a term insurance policy from which Ramsey himself ultimately benefits.      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

According to David, Ken Fisher’s hate toward annuities is visible in what can be considered “one of the most successful attacks on any financial product in history”. David discusses why, in his opinion, Ken Fisher sees annuities as the perfect marketing tool to build his own asset management firm. There are two things annuities can do that no other financial product can – David explains what they are. Academic studies that go back to the early 1960s seem to suggest that annuities are the best way to maximize retirement income. There appears to be a massive information gap facing a generation of retirees who are unaware of the value annuities can play in helping them spend more income in retirement. David shares an example by Dr. Michael Finke, one of the foremost experts on the benefits of guaranteed lifetime income. David touches upon whether what Ken Fisher is doing can be considered illegal.     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 Ken Fisher Richard Thaler’s New York Times articles Peter Diamond “Ken Fisher Can’t Have It All” by Dr. Michael Finke

Financial expert and author Ric Edelman has stated that, in his opinion, anyone following Dave Ramsey’s 8% retirement withdrawal strategy is…doomed! The 4% rule has been the distribution rates’ gold standard for over 30 years. However, Suze Orman said that she wouldn’t use the 4% rule on any level.  David touches upon what he considers a “massive unintended consequence” of adopting Suze Orman’s 3% withdrawal rate in retirement. According to David, there isn’t a winner between a 3%, a 4%, and an 8% retirement withdrawal strategy. He gives a couple of examples that illustrate why that’s the case. David believes that, to get the best bang for your buck with the highest success rate over a 30-year retirement, a guaranteed lifetime income annuity is – almost always – the best way to go.   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 Suze Orman Ric Edelman

A recent Penn Wharton study found that the federal government will have to dramatically raise taxes within the next 20 years to avoid sliding into a debt spiral of high interest rates and debt payments. Former comptroller General David Walker has stated several times that taxes would have to double by 2030 or the U.S. will go broke as a nation. When it comes to retirement savings accounts, the federal government typically gives people a choice between paying taxes at the time of contribution or paying them on your distribution years down the road. A big advantage of contributing to a Roth IRA is that you’d be paying taxes at today’s historically low tax rates. David thinks that believing Walker and the Penn Wharton study means accumulating the lion’s share of your retirement savings in tax-free vehicles like Roth IRAs and Roth 401ks. David shares the approach he recommends having when it comes to Roth Conversions. The Roth 401k is one of David’s favorite tax-free investments – he explains why. For David, the real allure of the LIRP is that it provides a death benefit that you can receive in advance of your death for the purpose of paying for long-term care. David lists the pieces of the puzzle that make for a balanced and comprehensive approach to tax-free retirement.   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 Walker Penn Wharton study: “When Does Federal Debt Reach Unsustainable Levels?”

Former comptroller general of the federal government, David Walker, believes that tax rates will have to double, in order to avoid a financial collapse. The U.S. Government should be helped in preventing their growth. David McKnight points out a potential course of action that should be followed to avoid a possible financial collapse. Permanent solutions to stabilize the debt outlook are needed now…not 20 years from now when the crisis is already upon us. David touches upon the role that higher federal taxes and lower spending may have. What’s the best tool to shield yourself from the coming tax apocalypse? David knows and shares it on the show.     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 Jagadeesh Gokhale David Walker Penn Wharton Ken Smetters

Today’s episode is part 4 of David’s interview for Jesse Wright’s podcast, and it addresses the best way to figure out how much money you’ll need to be able to retire. David explains how to be able to identify what your retirement shortfall is going to be.  There are different approaches and each one comes with its unique traits – David discusses his favorite. Citing Suze Orman, David shares his thoughts on what the new retirement age should be. Jesse and David touch upon living abroad while in retirement, what that actually entails, and Act 60. David shares his experience living in Puerto Rico, and shares his #1 actionable retirement planning tip for people in their 50s.   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 Suze Orman

Today’s episode is part three of David’s interview on Jesse Wright’s podcast. They discuss the best way to ensure your savings last as long as you do.  Jesse shares a shocking stat: 65-year-old married couples have an 18% chance that at least one person in the relationship will live to be 95 years old. This means that there is a very real chance that at least one of them will outlive their savings.  For David, most Americans outlive their savings because they don’t save or invest enough to fund a 30-year retirement.  The majority of people who save enough are also at risk of running out of money because they’re not managing their money well enough in retirement. David defines sequence of return risk and how market declines in the early years of retirement could significantly reduce the longevity of your savings. David talks about the benefits of owning annuities as well as the ones that work best for retirement planning.  According to David, the biggest mistake people make in retirement is having all their savings in tax-deferred accounts by the time they retire.  The name of the game is not just saving enough by the time you retire, but distributing in a way that your savings last through your actuarial life expectancy. The 4% rule is hard to follow because it only works if you can constrain yourself to 4% each and every year of retirement.  If you can constrain yourself to 4% distributions adjusted for inflation in retirement, you have an 86% chance that your money will last through life expectancy. Every time you take out more than 4%, that success rate drops like a rock. The assumptions we use in our retirement plans are important and have real life implications if we use the wrong assumptions.     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 is the second part of David’s interview for Jesse Wright’s podcast. Beware of what you see on social media, says David. A lot of that content is by wayward life insurance agents employing pretty despicable tactics. David shares an example of bad advice and highlights why this is advice you should stay away from. For David, 99% of TikTok videos misrepresent what the IUL can do and the role it should play in your retirement. David explains why an IUL is sort of like getting married, including the “until death do you part” side of things. It’s important to get to the 0% tax bracket and to shield yourself from the impact of higher taxes…but getting help from someone who has experience is just as important. David points out two traits you would want your financial advisor to have as you plan for your retirement. David goes over what he considers a balanced and comprehensive approach to tax-free retirement planning. Many people forget that not all of the money that’s growing in your 401k is accruing to your benefit. A portion of that belongs to the IRS. 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 Walker

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 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 Walker Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David Walker

David and Khalen Dwyer discuss HonestMath.com's research proposing a conservative 4% annual withdrawal for a 30-year retirement--contradicting Ramsey's long-standing advice of an 8% withdrawal rate. Khalen explains how Ramsey's assumptions defy both mathematical principles and historical data.  He also reveals the financial instability retirees may face when following Ramsey's controversial 8% withdrawal rate. Khalen and David agree that the primary job of an advisor is to help investors set reasonable expectations. If doing that means the advisor is a hope stealer, then advisors can wear the hope stealer’s badge with pride. The first three to five years of retirement are very important and can set the economic tone for the rest of your retirement. For Khalen, investors must realize that their risk appetite might change as they get closer to retirement. The closer you get to retirement, the more your need to protect accumulated savings becomes more critical, as there is less time to recover from significant market downturns. When you’re 100% invested in stocks, the swings in the market tend to be much wider, and that exacerbates the sequence of return risk for the investor. David adds that poor investment performance during the initial years of retirement can deplete the portfolio more quickly than anticipated. Retirees who experience market downturns in the early years of their retirement and withdraw a higher percentage of their portfolio to cover living expenses might accelerate the depletion of the portfolio. Even if the market rebounds in later years, the portfolio may struggle to recover because the initial losses reduce the base from which subsequent returns are generated. Khalen highlights the substantial risk associated with an 8% withdrawal rate using real-life examples and historical data. David and Khalen question Ramsey's aversion to bonds and insistence on a 100% stock allocation. They discuss the psychological impact of market volatility in retirement, the importance of investing in bonds for portfolio stability, and why Ramsey's all-stock approach just doesn’t make sense. According to Khalen, one of the most important aspects of retirement planning is addressing the sequence of return risk.  The sequence of returns risk is the risk of experiencing poor investment performance, particularly negative returns, in the early years of retirement.     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 HonestMath.com @honest_math on Twitter Khalen Dwyer on LinkedIn