Your Authoritative Guide to Tax-Free Retirement Planning in 2025
Release Date: 02/19/2025
The Only Three Assets You’ll Need in Retirement
The Power Of Zero Show
David McKnight discusses the three assets he believes you really need for a stable, predictable tax-efficient retirement. Getting them right will dramatically reduce the risks that derail most retirements: Market risks, sequence of returns risks, longevity risks, tax risks, and long-term care risks. Stock market investments, with a 70% total US stock market index and a 30% total international stock market index, are the first thing David recommends. He defines them as “Your growth engine, the one that pays for your discretionary expenses in retirement.” David goes over...
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The Top 5 Retirement Mistakes You May Be Making
The Power Of Zero Show
David McKnight explores the five biggest retirement mistakes people make. When it comes to retirement “traps”, the obvious things such as picking the wrong stock, missing the next bull market or retiring at the wrong time are what typically comes to mind… The first mistake people tend to make when it comes to their retirement is believing that tax diversification is good enough. “Having the bulk of your wealth in tax-deferred accounts is like going into a business partnership with the IRS: every year, they get to vote on what percentage of your profits they get to keep. Not a very good...
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The Only Three Investments Dave Ramsey Owns (Is This Smart?)
The Power Of Zero Show
The focus of this episode is on what Dave Ramsey refers to as the only three investments he owns. “I have three investments: my business, paid-for real estate with no mortgages, and mutual funds,” says Ramsey. He goes on to emphasize that he doesn’t play single stock, doesn’t screw around with gold or Bitcoin, and that he doesn’t need your stock tip from your “broke golfing buddy with an opinion.” Host David McKnight wonders whether Ramsey’s investment model actually works in principle, and if parts of it can be replicated by everyday investors… Ramsey’s business...
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The Roth Conversion Myth Most Financial Advisors Get Wrong
The Power Of Zero Show
David McKnight addresses a myth floating around the financial world: “For a Roth conversion to make sense, you need many years for the Roth to grow so you can recoup the taxes you paid to the conversion.” David stresses why this way of thinking is fundamentally wrong – it’s built on the wrong assumption that all the money in your IRA belongs to you… when it actually doesn't. Remember: your IRA isn’t one pile of money but two piles sitting in the same account. One pile belongs to you, while the other to the IRS. What’s unknown is how big the IRS’ pile is going to be when you...
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Trump: No Income Tax in 2026!
The Power Of Zero Show
This episode revolves around President Donald Trump’s claim that, due to the massive tsunami of tariff revenue that’s flowing into the U.S. coffers, Americans won’t have to pay income tax in 2026. David McKnight looks at the 2025 fiscal year: the Federal Government spent about $7 trillion and brought in about $5 and a quarter trillion in revenue. While breaking down the math related to the 2025 fiscal year, David points out that “Revenue from income taxes is the single largest source of Federal revenue”, while “Tariffs, by contrast, are one of the smallest.” Even Trump’s own...
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Congress Just Proposed a Major Change to Roth IRA’s—Here’s What It Means for You
The Power Of Zero Show
David McKnight addresses a brand new proposal that could transform the way Americans use Roth IRAs and Roth 401(k) – and that could have serious implications for your retirement flexibility, liquidity, and long-term tax strategy. With the current status quo, if a person has money in a 401(k) or even a Roth 401(k), they can usually roll it out into an IRA when they retire or leave their job. However, money can’t roll the other direction: you can’t take a Roth IRA and move it into a Roth 401(k)... A new bipartisan bill introduced by Republican Representative Darin LaHood and Democrat...
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What Are the Creditor Protection Rules for Roth IRAs and Roth 401(k)s?
The Power Of Zero Show
In today’s episode, David McKnight breaks down the creditor protection rules for Roth IRAs and Roth 401(k)s, as well as why more and more Americans are turning to tax-free accounts to insulate themselves from creditors… and the Government itself. In theory, under Federal Law, all IRAs traditional or Roths receive a certain level of bankruptcy protection under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. However, that protection is specifically tied to bankruptcy proceedings. If you’re sued in civil court, the Federal bankruptcy statute doesn’t automatically...
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Top Five Reasons to Pick a Roth 401(k) Over a Traditional 401(k)
The Power Of Zero Show
This episode features David McKnight sharing the top five reasons why a Roth 401(k) is far superior to a traditional 401(k). Something important to keep in mind: the decision you make today will determine how much of your retirement money your future self actually gets to keep. David touches upon the fact that choosing the wrong 401(k) could cost you hundreds of thousands of dollars in unnecessary taxes in retirement. Tax rate risk is the first big reason why you should consider investing in a Roth 401(k) over a traditional 401(k). David lists a series of key questions people who invest in a...
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Suze Orman Says Roth IRAs Are Great — But Here’s What She’s Missing
The Power Of Zero Show
This episode sees David McKnight look at Suze Orman, who, despite being one of the most widely recognized financial voices in America, shares what appears to be incomplete advice. David believes that Orman has done a lot of good for a lot of people thanks to her financial discipline-centered approach (in addition to being a big proponent of Roth IRAs). He agrees with Orman: “Roth IRAs are powerful, no doubt about it. You contribute after tax dollars, your money grows tax-free, and, provided you meet the requirements, you can withdraw those funds in retirement 100% tax-free”. The U.S....
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The 3 Questions You MUST Answer BEFORE Doing a Roth Conversion
The Power Of Zero Show
David McKnight addresses three key questions you must be able to answer before executing a single Roth conversion. Too many people go for Roth conversions without a game plan – this is something that can lead to overpaying taxes and running out of money sooner than anticipated. David points out that if you can’t answer the three key questions, you should stop and reevaluate because guessing here can cost you big. “What’s the total amount I should convert from my IRA or 401(k) to tax-free?” is the first and most critical of the three questions. Remember, the goal of a Roth conversion...
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