Your Authoritative Guide to Tax-Free Retirement Planning in 2025
Release Date: 02/19/2025
Greatest Retirement Mistake
The Power Of Zero Show
While on the golf course with his son, David McKnight got asked a question, by a couple of men in their early 70s, every pre-retiree and retiree wonders at some point: “What’s the biggest mistake people make when preparing for retirement?” Many people spend their entire career saving money in tax-deferred accounts like 401(k)s and IRAs. As that balance grows larger every year, it’s easy to get the illusion that all that money belongs to you, while a larger portion actually belongs to the IRS. How much of that sum you ultimately get to keep depends on what tax rates happen to be...
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The Hidden Costs of Whole Life Insurance
The Power Of Zero Show
For many people, an approach that incorporates whole life insurance has become part of their broader retirement strategy. Is that a good way to go? That’s what David McKnight addresses in this episode. While Whole Life has some legitimate applications, especially for people who are risk-averse and are looking for guaranteed steady accumulation, there’s an option that does the job more effectively: Indexed Universal Life (IUL). David touches upon why you may want to opt for IUL instead of Whole Life, including the fact that, with IUL, you can access your cash value in retirement without...
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Why You Should Replace Your Bonds with an Annuity
The Power Of Zero Show
In this episode of The Power of Zero Show, host David McKnight discusses why it may make sense to replace the bonds in your retirement portfolio with a Fixed Index Annuity, and how doing so could lead to a much better outcome for your retirement. For decades, financial advisors have followed the conventional wisdom of the 60-40, 60% stocks, 40% bonds. As you approach retirement, that ratio shifts even further in favor of bonds… …however, the problem is that today’s bond market isn’t built like it used to be, and bond yields are still below their historical averages. David touches upon...
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Where Dave Ramsey and Suze Orman Fit and Where They Don't
The Power Of Zero Show
David sits down with John Manganaro to unpack the advice of financial gurus like Dave Ramsey and Suze Orman. While their guidance has helped countless Americans get out of debt, David explains why their cookie-cutter approach to retirement income planning can fall short. Why “hope over math” is a dangerous foundation for retirement planning—David explains why advice built on optimistic return assumptions leaves disciplined savers exposed to massive disappointment later. Learn how Dave Ramsey’s 8% withdrawal and 12% return claims mislead investors and why following them could drain your...
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If A.I. Leads to Universal Basic Income, How High Will Taxes Have to Go to Pay for It?
The Power Of Zero Show
David explains why A.I. could make Universal Basic Income (UBI) a reality sooner than you think. As machines take over more jobs—especially white-collar ones—we may need a new safety net just to keep society stable. Why UBI is no longer a fringe idea but a serious policy being considered in Washington. It promises monthly cash payments to every adult, regardless of their job or income. David highlights the staggering cost of UBI if implemented today. At $12,000 per adult annually, the total price tag would hit $3.1 trillion a year—equal to all Social Security and Medicare spending...
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Social Security and Medicare Trustees Just Dropped a Bombshell (New Dates for Insolvency)
The Power Of Zero Show
David starts by talking about the apocalyptic headwinds facing Social Security and Medicare and what it means for your retirement plan. The Social Security and Medicare trust funds are projected to be insolvent by 2033, with the combined Social Security trust fund gone by 2034. David explains why this isn’t just a distant problem: Without intervention, roughly 70 million Americans will face major benefit cuts—23% for Social Security, 11% for Medicare. How this impacts you personally: If you're 59 today, you’ll reach full retirement age right as the trust fund runs dry. If you’re...
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Five Mathematical Reasons to Delay Retirement by Five Years
The Power Of Zero Show
How could postponing your retirement by just five years transform your retirement picture? David McKnight shares mathematical reasons that could help. Reason #1 is compounding. As David explains, “When you delay retirement, your money has more time to grow.” The second reason for considering the postponement of your retirement has to do with the fact that an extra 5 years would give you more time to save. Reason #3: Worried that your money won’t last as long as you do? Just remember that it doesn’t need to last as long. If you retired at 65 and lived to 95, you’ll need your...
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Vanguard--4 to 5% Stock Market Growth Over Next 10 Years (Should You Change Your Retirement Strategy?)
The Power Of Zero Show
In this episode of the Power of Zero Show, David McKnight looks at headlines, such as those from Vanguard, BlackRock or Morningstar, that have predicted a dismal forecast for stock market returns over the next decade. Since such articles predict 4-5% annual growth for the next decade, many investors are pondering whether they should take some chips off the table. Back in 2015, those same institutions and companies stressed that valuations were too high and that, since the markets had a great run, it couldn’t possibly continue anymore. Vanguard forecasted 4-6% returns, BlackRock predicted...
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Should You Take Social Security Early Given the Scary Trust Fund Report?
The Power Of Zero Show
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...
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The Vindication of Indexed Universal Life and Fixed Indexed Annuities: What the Ernst & Young Study Finally Proves
The Power Of Zero Show
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...
info_outlineIn this episode of The Power of Zero Show, David McKnight addresses different strategies for tax-free retirement planning in 2025.
Most Americans are a little nervous when it comes to the fiscal trajectory of the U.S..
According to expert forecasts, the likely extension of the 2017 Trump tax cuts would take the current $36 trillion of national debt beyond the estimated $54 trillion by 2034 – taking it all the way to $59 trillion.
A recent Penn Wharton study predicts that if the U.S. doesn’t right its fiscal ship of state by 2034, no combination of raising taxes or cutting spending will arrest the financial collapse of the nation.
“Former Comptroller General of the Federal Government David Walker says that we may have to double tax rates within the next 10 years in order to keep our country solvent”, says David McKnight.
Something important to consider is how to best shield your retirement savings from the potential tsunami of higher taxes down the road.
David recommends creating a balanced, comprehensive strategy that takes advantage of all the “nooks and crannies” in the IRS tax code.
The cost of getting money into tax-free vehicles is that you have to be willing to pay a tax.
The next nine years represent a historical opportunity to pay those taxes while they’re on sale.
The approach David suggests thinking about can incorporate as many as six different streams of tax-free income – none of which shows up on the IRS’ radar but all of which contribute to you being in the 0% tax bracket.
A tax-free investment means no taxes at all: no federal income tax, no state income tax, or no capital gains tax.
When taking distributions, tax-free investments should not count as provisional incomes – meaning that they don’t count against the thresholds which cause Social Security taxation.
The Roth IRA is the first truly-tax free retirement account David believes you should be contributing to in 2025.
The second truly tax-free account worth considering in 2025 is the Roth 401(k).
The potential for a company match is the one thing that makes Roth 401(k) impossible to ignore – and turns it into an instant return on your investment.
After a Roth IRA and a Roth 401(k), the third tax-free alternative you should think about this year is a Roth conversion.
David discusses the ideal scenario in which you should opt for a Roth conversion.
Your IRA or 401(k) is the fourth stream of tax-free income David touches upon.
Tax-free distributions from your IRA or 401(k) are what David refers to as “the Holy Grail of financial planning” – since they do something no other strategy can do.
The life insurance retirement plan and tax-free Social Security are two additional strategies David dives into.
Tax-free Social Security is unique because it shields you from several risks, including tax rate risk, inflation risk, long-term care risk, sequence of returns, and longevity risks.
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
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