David talks about the Power of Zero “philosophy,” as well as a recent Penn Wharton study saying that, if all we do is continue on this same course, by 2043 there will be no arrest in the financial collapse of our country.

95% of Americans have the lion’s share of their retirement savings sitting in what we call tax-deferred vehicles like 401(k)s and IRAs.

A big problem most Americans face: every year the IRS gets a vote on what percentage of your profits they get to keep.

David shares the Power of Zero origin story and he explains what someone should do to get as close as possible to someone else.

David addresses the question “Where should we be investing our retirement dollars?

$29,200 is the limit under which you’ll get to experience the water.

“A lot of people don’t realize that their social security number can be taxed,” says David.

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

Penn Wharton

The Insurance Buzz

Today’s video is from David’s conversation with financial advisor Bruce Hosler.

They discuss why financial advisors like Ken Fisher don't want you to do Roth conversions.

David reveals why there is a lot of incoming resistance from financial "Gurus" about moving to tax-free and using the tools necessary to get to the 0% tax bracket.

David talks about his new book, Guru, and all of the interference he’s facing in trying to get the Power of Zero message out to the American people.

Most of these gurus believe that tax rates in the future are likely to be higher than they are today. But when you go to their websites, there are no practical strategies on exactly how you should arrange your assets to best shield yourself from the impact of higher taxes.

David highlights why Dave Ramsey is against any form of permanent life insurance. He even has a famous quote, “Permanent life insurance is 100 % crap, 100 % of the time.”

If you can fund your lifestyle out of your cash value life insurance in the year following a down year in the stock market, it gives your stock market portfolio a chance to recover before you take further distributions.

David explains how this act alone can increase the sustainable withdrawal rate on your stock portfolio from 4 % to 8%.

David and Bruce agree that people need to find ways to create multiple streams of tax-free income from multiple sources.

David reveals that conflict of interest is what prevents fee-based advisors from promoting the power of zero message.

David and Bruce talk about the unfunded obligation for Social Security, Medicare, and Medicaid--and the amount of money the government needs to have to pay for Medicare over the next 75 years.

Financial advisors are not educated enough about the reality of future higher tax rates. If they were, David believes they would be more familiar with the ways to mitigate against rising taxes down the road.

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

How much of your social security is getting taxed, at what rate, and is there anything you can do about it?

Unfortunately, the IRS doesn't make it easy for people to understand how much of their social security is taxable and at what rate.

David explains that the best way to understand social security taxation is to first know about provisional income--this is the income the IRS tracks to determine how much of your social security will be taxable.

As you continue to increase your IRA distributions and, therefore, your total provisional income, the percentage of your social security that becomes taxable quickly begins to rise.

The IRS says that if your provisional income is between $32,000 and $44,000, up to 50% of your social security can become taxable.

Fortunately, there are some scenarios where you wouldn't pay any taxes, thanks to standard deductions.

The most obvious thing to do if you don’t want social security taxation is to do a Roth conversion.

According to David, any income taken from a Roth IRA does not count as provisional income and, therefore, does not count against the thresholds that cause social security taxation.

However, the only time it makes sense to do a Roth conversion is if you believe that your tax rate in the future is likely to be higher than it is today.

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