The Power Of Zero Show Podcast Por David McKnight arte de portada

The Power Of Zero Show

The Power Of Zero Show

De: David McKnight
Escúchala gratis

Tax rates 10 years from now are likely to be much higher than they are today. Is your retirement plan ready? Learn how to avoid the coming tax freight train and maximize your retirement dollars.The Power Of Zero Economía Finanzas Personales
Episodios
  • Should You Take Social Security Early Given the Scary Trust Fund Report?

    Should You Take Social Security Early Given the Scary Trust Fund Report?
    Jul 23 2025
    The 2025 Social Security Trustees Report is out and the news is bleak. This episode of the Power of Zero Show looks at the potential repercussions if nothing changes by 2033. If things don't improve, Social Security will face a cash flow deficit that triggers a 23% across-the-board benefit cut - and that's one year earlier than predicted. But that's not all… in fact, it gets far worse, says host David McKnight. The system is already $72.8 trillion in the red, an unfunded liability that's twice the size of the national debt and $10 trillion worse than 2024. This is by no means a temporary funding glitch, it's a permanent structural crisis. The first finding of the 2025 Social Security Trustees Report is that the Trust Fund goes insolvent a year earlier than anticipated in last year's report. And there's no wiggle room: Absent intervention on the part of Congress, benefits will drop automatically by 23% for all recipients. The next noteworthy aspect is the program's unfunded obligations, the present value of future benefits not covered by future taxes. That gap is a staggering $72.8 trillion, which is $10 trillion more compared to 2024. The cause for this $10 trillion jump? The removal of some pension offsets and benefit boosting by last year's Social Security Fairness Act… The final revelation of the report is that trustees chose to focus on the 75-year deficit and ignored the infinite horizon that is so relevant in a pay-as-you-go system. The main tool to try to change the status quo and fix the issue is either cutting benefits, raising taxes, or some combination of the two. David addresses all three scenarios. The first one revolves around Congress permanently okaying a 30% across-the-board cut starting today - alternatively, they could wait until 2033 and implement a 23% cut by default. The second scenario sees an increase of the Social Security's FICA payroll tax from 12.4% to 17.6%. Thirdly, a combination of smaller tax increases and moderate benefit cuts. David touches upon the possible consequences of not addressing these issues immediately. The 1983 Greenspan Commission only patched half of the long-term hole in Social Security, leading to the problem being 2.5 times bigger today and requiring even more aggressive solutions to create a permanent fix. David explains that, if you count all the government's off-the-book promises, Medicare, defense, debt service, the fiscal gap is around 7% of GDP. That translates to the country having a fiscal shortfall year in and year out of 7% of GDP FOREVER. How bad is the situation? "You'd have to fire every federal employee, cancel every NASA mission, basically shut everything down… and you still wouldn't plug in the hole in our long-term fiscal outlook," says David. David is very clear on what's needed: Major structural reform to healthcare entitlements, taxes and benefits. David shares two things to consider before you decide to draw your Social Security benefits early. A quote by Dr. Larry Kotlikoff highlights the fact that taking benefits early won't protect you from reduced benefits later, and that the reduction could indeed be less for those who waited in order to provide equity with those who collected early. David recommends saving as much as you can so that you can compensate for any future cuts to Social Security, as well as modeling multiple scenarios (drawing now vs. drawing later), keeping an eye on Congress and the news, and to focus on other risks your retirement may face - think longevity risk and tax rate risk, for instance. In conclusion: notwithstanding all that bad news from an actuarial standpoint, it still makes sense to push off Social Security just as long as you can. Mentioned in this episode: David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track 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 1983 Greenspan Commission 2025 Social Security Trustees Report Dr. Laurence “Larry” Kotlikoff
    Más Menos
    9 m
  • The Vindication of Indexed Universal Life and Fixed Indexed Annuities: What the Ernst & Young Study Finally Proves

    The Vindication of Indexed Universal Life and Fixed Indexed Annuities: What the Ernst & Young Study Finally Proves
    Jul 16 2025

    Ernst & Young recently came out with a new updated study, which is likely to scandalize mainstream financial experts like they did with their 2021 study.

    Back then, they asked the question, “Is the stock market-only retirement approach really the strategy that gives you the highest levels of income and the best outcomes over a 30-year retirement?”

    In their new study, on the other hand, they substituted Indexed Universal Life for Whole Life, and Fixed Index Annuities for Deferred Income Annuities – a move that led to unexpected and spectacular results.

    Host David McKnight explains that by going beyond the investment-only playbook and by integrating tools like Whole Life and Deferred Income Annuities into your retirement strategy, you get higher levels of income and a higher likelihood of your money lasting through life expectancy and beyond.

    For years, Indexed Universal Life and Fixed Index Annuities have been misrepresented by many (inexperienced) insurance agents, have been vilified by media personalities using a “one-size-fits-all” approach, and have been ignored by investment-only advisors.

    In the latest iteration of their study, Ernst & Young ran three case studies: one featuring a 35-year-old couple just starting their financial journey, one involving a 45-year-old couple, and the last one looking at a 65-year-old couple on the doorstep of retirement.

    David asks why, if the E&Y case studies show that IULs and FIAs can dramatically improve income levels and the likelihood of money lasting through life expectancy and wealth to heirs, they have been so frequently demonized?

    David touches upon three distinct reasons why he believes the critiques occur.

    “Together, the IUL and FIA act as the stabilizers on your retirement journey,” says David.

    Utilized in conjunction with your investment portfolio, IUL and FIA increase your income, the likelihood your money lasts through life expectancy, and they increase the money that gets passed on to your heirs.

    For David, data proves that cash value life insurance and annuities work whether you’re just getting started or are stepping into retirement.

    Mentioned in this episode:

    David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track

    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

    Ernst & Young

    Dave Ramsey

    Suze Orman

    S&P 500
    Más Menos
    9 m
  • Can Republicans Actually Make the Trump Tax Cuts Permanent?

    Can Republicans Actually Make the Trump Tax Cuts Permanent?
    Jul 9 2025
    President Trump’s proposed Big Beautiful Bill (BBB), which has been getting everyone’s attention of late, is the topic of this episode of The Power of Zero Show. Host David McKnight points out that the “crown jewel” of the BBB is the extension of the 2017 Trump tax cuts. The 2017 Tax Cuts and Jobs Act (TCGA) brought about cuts to individual income taxes, corporate taxes, and a dramatic expansion of the estate tax exemption. While corporate tax cuts were made permanent – going from 35% to 21% – the tax cuts for individuals and estates had an expiration date. If the status quo stays unchanged, those tax rates will revert back to their 2017 levels on January 1st, 2026. David goes over how Republicans could make the tax cuts permanents through some outside the box accounting techniques. Since Republicans don’t have a supermajority in the House or Senate, they would have to rely on a special Senate process known as Budget Reconciliation. A few fiscal conservatives such as Representative Thomas Massie and David Schweikert, as well as Senator Susan Collins and Rand Paul may not be on board with such an approach… Their main concern? The fact that making these tax cuts permanent would add between 4.6 and 5.5 trillion dollars to the national debt over the next 10 years. David addresses the single greatest obstacle preventing Republicans from making the Trump tax cuts permanent: the Bird Roll. The Bird Roll states that budget reconciliation bills cannot increase the federal deficit beyond the budget window, which is typically 10 years. In other words, to make the tax cuts permanent, Republicans would have to find a way to pay for them. Cuts to Medicaid and the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamps Program), as well as tariffs on imports are how Republicans are trying to go about things. Some Republicans suggest that the tax cuts won’t increase the national debt over the next decade and beyond, for the fact that they’ll actually spark economic growth. According to the Congressional Budget Office, the cost of the 2017 tax cuts was $1.9 trillion over an eight-year period, while the tax cuts themselves only increased revenue by about $400 billion. As David stresses, “The Tax Cuts and Jobs Act of 2017 ended up increasing the debt by about $1.5 trillion, meaning that the tax cuts were in no way self-financing.” If Trump tax cuts were to be made permanent, it will almost certainly increase the likelihood that taxes will have to skyrocket by the year 2035. According to a Penn Wharton study, when the country’s debt-to-GDP reaches 200%, we’ve passed the point of no return. If that were to happen, no combination of raising taxes or reducing spending would arrest the financial collapse of the nation. Former Comptroller General of the Federal Government, David M. Walker, has even suggested that tax rates could have to double to keep the U.S. solvent. This means that even if Republicans make the tax cuts permanent, they will have to raise taxes eventually… For David, this may lead to Congress being forced to raise taxes in dramatic fashion in 2035 in an effort to avoid a financial apocalypse in 2040. David believes that, if you have the lion’s share of your retirement savings swirling away in tax-deferred accounts like 401(k)s and IRAs, you should take advantage of what’s likely going to be 8 to 10 years more of historically low tax rates. Mentioned in this episode: David’s national bestselling book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track 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 Donald Trump Tax Cuts and Jobs Act Representative Thomas Massie Representative David Schweikert Senator Susan Collins Senator Rand Paul Congressional Budget Office Penn Wharton David M. Walker
    Más Menos
    10 m
Todas las estrellas
Más relevante  
Thank you so much for making this podcast available to listen to on Audible.

Excellent!

Se ha producido un error. Vuelve a intentarlo dentro de unos minutos.
David speaks clearly and is very helpful and entertaining. Small facts and helpful hints on retirement planning.

Clear communication amd knowledge

Se ha producido un error. Vuelve a intentarlo dentro de unos minutos.