The Power Of Zero Show

David makes a clear preface: “If anyone ever tells you to cash out your 401k and put it all into an IUL, you’re to turn around and run the other way!” This episode addresses what David refers to as “the worst IUL TikTok video I’ve ever seen; a video that’s so replete with manipulative sales tactics and lawsuit-worthy financial advice.” David points out one of the manipulative sales strategies included in the video: making the prospect feel as if she needs help by making her feel confused and overwhelmed by the number of alternatives. “Cash now vs. an awesome retirement plan later” is another unethical tactic David discusses. Beware: if you don’t liquidate your 401k prior to 59 and a half you’ll incur a 10% penalty. Need to liquidate your 401k before then? Don’t do it all in one year.  Otherwise, all of that money would be realized as income and taxed at your highest marginal tax bracket – all in the same tax year. Remember: closing out your 401k and stopping contributions will lead to you no longer receiving the company match.  Over the course of your retirement, this last point will end up costing you hundreds of thousands of dollars. David stresses the lack of relevant questions being asked by the financial advisor featured in the TikTok video. David deems the video to be one of the worst cases of IUL malfeasance he’s ever seen on social media. Moreover, he believes that advisors like the one in the video should be outlawed and fined.     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

One of the things Dave Ramsey is famous for is telling his audience that they can take sustainable 8% distributions from their stock market portfolios in retirement. David has two issues with this recommendation: it ignores reams of academic data on sustainable withdrawal rates, as well as the concept of sequence of return. David points out the potential repercussions of following Ramsey’s approach. According to the mainstream financial community, 4% is the actual “golden rule” for sustainable distribution rates in retirement. Ramsey has long complained about the 4% rule being a pretty expensive way to go… David illustrates a key problem with an 8% withdrawal rate and discusses the role of a volatility shield. David explains that the money you can put in a volatility shield has to grow tax-free and allow for tax-free distributions. It’s possible to increase your sustainable withdrawal rate on your stock portfolio to as high as 8%, with a 95% chance of never running out of money – David explains how. On an apple-to-apples basis, guaranteed lifetime income annuities give you a much higher income than living by the 4% rule in retirement. Following this Dave Ramsey strategy? David believes that it’s likely going to force you to run out of money 15-20 years in advance of life expectancy.     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 talks to Tom Hegna, an economist, author, and popular industry speaker considered by many to be the retirement income expert. David reveals how he learned about the unstable fiscal trajectory of the U.S. and why he wrote the book, "The Power of Zero." The book emphasizes the importance of preparing for higher tax rates. It offers strategies to help you protect your retirement savings against the impact of potentially higher tax rates in the future. David talks about teaching financial principles to his children--tithe 10%, save 20%, spend the remaining 70%. Did you know Americans have 95% of their accumulated retirement dollars in IRAs and 401Ks? It’s great that Americans are saving for retirement but the downside to this strategy is that traditional IRAs and 401Ks are tax-deferred. Taxes are deferred until the funds are withdrawn. Meaning you’ll potentially pay more in taxes in retirement.  David reveals why it’s okay to preemptively pay taxes before the IRS absolutely requires it of you. Tips for individuals in their 20s and 30s on how to save and invest in tax-free accounts.  Why it’s never a good idea to spend most of your income on depreciating assets. David shares how his system for investing differs from mainstream financial advice. Tom and David agree that people cannot become wealthy by borrowing money to put into depreciating assets. David’s investing principle is built on a simple formula: start saving money as early as today, put it in tax-free accounts, do it consistently for 40 years, wait, and you’ll have a great retirement. According to David, whatever you decide to do in college, someone has to be willing to pay you money in exchange for the services you provide. The longer your investment horizon, the more likely your taxes will be higher in the future. Not only do you need to start investing early, you also need to invest tax-free. Remember, the longer your investment horizon, the more it makes sense for you to invest in tax-free accounts. We are marching into a future where the cost of servicing the national debt will consume the entire federal budget. When this happens, David believes the Federal Reserve will be forced to raise taxes or risk going bankrupt.  So, how can Americans protect themselves from the risk of rising taxes?  First, acknowledge that taxes will be higher in the future, invest early, and start investing in tax-free accounts.  David and Tom share their thoughts on why permanent life insurance is by far the best tax benefit in the IRS tax code. David announces his upcoming book, "Guru: Why Financial Gurus Are Leading You Astray and How to Get Back on Track," which critiques mainstream financial advice and offers a more personalized approach to tax-free investing.     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 talks to Jay Disberger, the caller on Dave Ramsey's viral 4% rule meltdown. They start the discussion by describing why the clip went viral and how people can get their questions answered live on the Dave Ramsey Show. Jay's motivation for the call: To get clarity on how best to withdraw your money in retirement and get Dave to take a stand on sustainable withdrawal in retirement.  Jay shares his journey to finance coaching and saving for retirement.  David and Jay discuss why George Kamel was right about the 4% withdrawal strategy and why Dave Ramsey's 8% withdrawal rate is misleading. Why Dave Ramsey is not a huge fan of the 4% rule or the people who preach it — He believes it's too low and unrealistic. You don't need to withdraw 4% of your savings for your nest egg to survive. According to Dave Ramsey, you're missing out on a big opportunity if you only withdraw 4% from an investment portfolio earning 12%. David and Jay agree that Dave Ramsey lives in a fantasy world where he thinks stratospheric distribution rates are sustainable in retirement. The biggest issue with an 8% withdrawal rate is that it doesn't account for market volatility. Just because you average 12% per year doesn't mean you're guaranteed 12% returns yearly. The only way to have a productive conversation with people who don't think they can be wrong is to ask them open-ended questions in the hope that they come to the conclusion themselves. According to David, we live in a world where anything you say that flies in the face of reason will be clipped and posted online.  Dave Ramsey does a great job of motivating people to get out of debt and get on the path of financial independence. The problem lies in his absurd retirement planning advice. The biggest problem with Dave Ramsey is that he's not very nimble when it comes to changing his thoughts according to new research and data. Jay and David agree that the 4% rule is not for everyone, but it's also not sustainable to follow the 8% rule.  Jay reveals what he would tell Dave Ramsey if he ever got the opportunity to talk to him again.     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 Jay Disberger on LinkedIn Jay Disberger at HopeFilledFinancial.com The HopeFilled Financial Podcast

Dave Ramsey recently eviscerated his co-host George Kamel for preaching the 4% rule. According to George, withdrawing only 4% of your savings is the easiest way to guarantee your money lasts throughout retirement. George further adds that the 4% rule is a math-based approach to sustainable withdrawals in retirement. For Dave Ramsey, the 4% is senseless and only geared toward stealing people’s hope for a brighter retirement. He believes an 8% withdrawal rate is more sustainable since your savings will be growing at a rate of 12%; factor in 4% for inflation, and you’re left with 8%.  It’s clear Dave Ramsey is oblivious to the sequence of return risk, which could force you to run out of money 15 to 20 years early if you experience a series of negative returns in the first decade of retirement.  The fact is, even if you average 12% rates of return throughout retirement, you won’t be getting 12% every single year. Some years, you’ll get 20%, and other years you’ll get -26%.  David explains that the 4% rule gives you peace of mind that regardless of the swings in the market, you’ll have a reasonably high chance of not outliving your money. Because Ramsey has millions of dollars, he has the license to utilize planning assumptions that are wildly at odds with history and academic research. If you’d like a stress-free retirement, ignore Dave Ramsey’s advice and embrace strategies that are built on sustainable retirement planning principles like the 4% rule.     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 talks about the three main types of tax-free retirement advisors and the one that will guarantee a hassle-free retirement. The first type of advisor is the TikTok advisor. This is the advisor who will preach the prospect of dramatically higher tax rates in the future. The only downside to their message is that they believe the only way to shield yourself from the rising tax rates is to put all your retirement savings into an IUL. If you believe in a balanced and comprehensive approach to retirement planning, steer clear of these types of advisors. It’s unwise to build a retirement plan on the foundation of an IUlL and exclude every tax-free alternative in the tax code. The second type of advisor is the one who believes in tax-free retirement planning but is not acquainted with the data that proves tax rates will rise dramatically in the future. If you are interested in shielding your assets against the impact of higher taxes, avoid these types of advisors like your retirement depends on it. Because it does.  The third type of advisor is knowledgeable on data that proves tax rates will dramatically rise in the future and advocates for a balanced, comprehensive approach to tax-free retirement.  If you believe that tax rates in the future will be dramatically higher than they are today, then you also need to recognize that not all financial advisors are equally equipped to help shield your retirement savings from those higher taxes. Your job as an investor is to get an advisor who understands the unique fiscal challenges facing our country and understands that the best way to protect yourself from those challenges is to implement a balanced, 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 breaks down a recent Dave Ramsey interview where he advised a 50-year-old widow on the best way to save, invest, and withdraw her retirement savings. According to Ramsey, if the lady invests $1000 every month for 15 years, she will have accumulated $500,000, which gives her permission to withdraw 10% of her savings every year for the rest of her life.  The problem with this recommendation is that she will likely earn 9% returns per year, not 12%.  She is also more likely to run out of money before running out of life if she withdraws 10% of her savings every year.  The gaping hole in Dave Ramsey’s investment approach is that he seems to have a limited understanding of the sequence of return risk. This is the order in which you experience investment returns in retirement. Generally, it’s safe to show future returns based on a historical track record consistent with your future investment horizon. For example, if you want to know what rates of return you’ll likely experience in the next 15 years in the S&P 500, you need to look at how the index performed in the past 15 years.  According to David, Ramsey’s overly inflated retirement variables are setting his listeners up for failure. By inflating his assumptions, Dave Ramsey gives his listeners an overly optimistic view of how much money they must save to reach their retirement goals. But why does Dave Ramsey have such a flawed view of retirement planning? David believes it comes down to two things: Dave Ramsey likes to portray himself as the retirement planning outsider who is at war with the mainstream financial planning community. He believes that if he can show his followers lucrative investment projections, more of them will sign up for his financial independence programs.  Don’t be seduced by Ramsey’s inflated rates of return or his massive withdrawal rate assumptions. You’re much better off using a 9% rate of return and a 4% sustainable distribution in 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

Today’s episode is part three of David’s interview with Power of Zero Advisor Terry DuPont.  Trump tax cuts were not permanent – David explains why 2026 is going to be a key year for that. In his book Comeback America, former Comptroller General David Walker predicted that, by 2023, tax rates would have to double – or more – to keep the U.S. solvent. David shares what he believes people should do in the next few years as the country approaches an “apocalyptic” scenario. Terry DuPont is amazed by the fact that families and individuals don’t seem to understand the fact that the largest expense in their lifetime will continue to be the same. According to Terry, the main issue is that people don’t calculate that expense into their future. Terry asks David about the one thing he knows now that he wishes he knew when he started. David opens up about the role David Walker has played in his journey as well as about his definition of success. David warns people against letting a year go by without taking advantage of historically-low tax rates.     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 Terry DuPont Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David Walker Bill Clinton David Walker on 60 Minutes Why Your Taxes Could Double (2009 CNN article by David Walker) I.O.U.S.A. (2008 documentary featuring David Walker)

Today’s episode is part two of David’s interview with Power of Zero Advisor Terry DuPont.  David talks about the approach many major money management institutions follow, and how it differs from how David and Terry do things. There are situations where large money management institutions forbid their advisors from ever bringing up, for example, Roth conversions. David invites listeners to browse the web trying to find a Ken Fisher article discussing the benefits of a Roth conversion. David discusses what makes the Power of Zero approach stand out in the financial planning industry. People seem to be hungering for real solid strategies that can help insulate them from the impact of rising taxes, says David. David lists a few reasons why the advice people may get from gurus like Dave Ramsey or find on platforms like TikTok isn’t useful. David recommends having a balanced and comprehensive approach to tax-free retirement that takes advantage of all the nooks and crannies in the IRS tax code. There are different things David likes about Roth IRAs, Roth 401ks, Roth Conversions, Life Insurance Retirement Plans, and tax-free social security – he touches upon them.     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 Terry DuPont Ken Fisher Fisher Investments Dave Ramsey Suze Orman

Today’s episode features some of the highlights of David’s appearance on the Your Money with David Hays podcast. David touches upon what he would focus on and how long he believes he would last if he were president of the U.S.. David’s next book will probably have the title Guru. For a while, David Hays has half-jokingly said that he would accept the responsibility of mayor. David introduces two perspectives into the picture: the point of view of financial gurus like Dave Ramsey and Suze Orman, and that of Ed Slott – whom USA Today dubbed “America’s IRA Expert.”  Many people underestimate the financial costs of long-term care for their parents, spouse, or partner, says David. David illustrates the traditional way to approach long-term care and what would make the most sense for those thinking about it for their loved ones.     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 Your Money with David Hays Dave Ramsey David M. Walker Bill Clinton George W. Bush Shark Tank Suze Orman Ed Slott USA Today