This TikTok Finfluencer Says His 76-Year-Old Dad Can Spend 7.5% and Still Grow His Portfolio. Let's Check the Math.
The Power Of Zero Show
Viral TikTok “finfluencer” Tyler Gardner claims his 76-year-old father can stay 100% in stocks. David McKnight breaks down exactly where that approach falls apart. Additionally, he reveals the retirement planning strategy that actually makes a 100% stocks allocation safe, so a market downturn doesn’t force you to sell at the worst possible time. Show Notes In this episode, David McKnight fact-checks a viral TikTok video from “finfluencer” Tyler Gardner explaining why his 76-year-old father is still invested 100% in stocks. David stresses that he doesn't have a problem with being...
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Five Years from Retirement? Do This.
The Power Of Zero Show
The five years before retirement are what David McKnight calls the Retirement Danger Zone, a window where a stock market crash could trigger Sequence of Returns Risk and even derail a well-designed plan. In this episode, he breaks down the retirement planning strategies that build an income floor, create a Volatility Shield, and protect your tax rate before it’s too late. Show Notes In this episode, David McKnight talks all things “Retirement Danger Zone”, the 5-year time window that precedes your retirement. When you’re 20 years from retirement and the stock market crashes,...
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I Have $1 Million in Taxable Accounts and $1 Million in IRAs. How Can I Prepare for Higher Taxes?
The Power Of Zero Show
If you've built up $1M in your IRA and $1M in taxable investments, David McKnight has a warning: every year that money stays put, the IRS gets to vote on your tax rate. He breaks down a retirement planning strategy for gradually converting your IRA to Roth – fast enough to beat rising rates, slow enough to avoid painful brackets. In this episode, David McKnight looks at what you should do if you have accumulated $1M in taxable investments, and $1M in traditional IRAs and are concerned about the possibility of higher taxes in retirement. He stresses that having money in IRAs...
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Best Reason to Delay Social Security To Age 70
The Power Of Zero Show
When is a good time to start your Social Security? David McKnight reveals why smart retirement planning means waiting until age 70 for reasons that have nothing to do with a bigger check… and everything to do with the years in between being your best window for Roth conversions. In this episode, David McKnight addresses one of the most common questions he gets from people approaching retirement: “When should I start taking Social Security?” David believes that there’s a compelling reason for having 70 as your default Social Security claiming age – and that isn’t so that...
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Should You Stop Roth Conversions at the 22% Tax Bracket?
The Power Of Zero Show
Should you stop your Roth conversions at the 22% tax rate, or push into the 24% bracket? David McKnight responds to a viewer's detailed case for stopping early, revealing why optimizing this year's tax bill can be the wrong retirement planning move over a 30-year horizon. You'll discover his "rip the band-aid off" approach and why saving money on taxes today isn't a victory if it costs you more tomorrow. In a recent video, David McKnight explained why he believes the 24% tax bracket is the sweet spot in the current tax code for Roth conversions. In this episode, he addresses a...
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Why Not Put Your Entire Retirement into 5.25% Treasuries? (Have You Won the Game?)
The Power Of Zero Show
Is putting your entire retirement planning strategy into 30-year treasuries really the safe bet it seems? David McKnight reveals why this approach could expose you to two hidden risks, and explains how the stock market and annuities might hold the real key to protecting your income. In this episode, David McKnight looks at whether putting your entire retirement portfolio into 30-year treasuries is the way to go. While it may seem like a pretty compelling argument, there’s a major problem with this strategy – and it comes down to two things: taxes and inflation. The U.S....
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Dave Ramsey’s 8% Retirement Rule: What Could Possibly Go Wrong?
The Power Of Zero Show
Dave Ramsey says retirees can safely withdraw 8% a year from the stock market, but does his retirement planning math actually hold up? David McKnight breaks down why Ramsey’s approach overlooks a critical risk, and why annuities may be the missing piece to sustainably boosting your retirement income beyond the traditional 4% Rule. In this episode, David McKnight examines Dave Ramsey’s 8% withdrawal rate claim and why retirement planning may need annuities, and not just the stock market. For Ramsey, you can take 8% per year out of your stock market portfolio in retirement, despite what...
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The Three Biggest Reasons Americans Hate Annuities
The Power Of Zero Show
Most Americans hate annuities and would tell you to avoid them… But what if the version you’ve been warned about isn’t the only option for retirement planning? David McKnight breaks down a strategy that’s quietly helping retirees sleep better at night and safeguard themselves against the 3 biggest annuities-related problems. In this episode, David McKnight looks at three perfectly legitimate reasons why Americans have been reluctant to embrace annuities, as well as a solution. The first problem is liquidity. David points out that one of the biggest fears in retirement is...
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Should High Earners Contribute to a Roth 401k?
The Power Of Zero Show
Should every dollar go into a Roth 401(k) if taxes will be higher? David McKnight reveals why that instinct could actually be one of the most expensive tax decisions a high-income earner can make when it comes to retirement planning. In this episode, David McKnight addresses two frequently asked questions: “If tax rates are going to be higher in the future, should I be putting every dollar into a Roth 401(k)?” and “Should I be converting as much of my IRA to Roth as quickly as possible?”. David believes that the current tax rates are as low as we’re likely to see in your...
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The Latest Proposal to Tax Roth IRAs: Should you be worried?
The Power Of Zero Show
Should you stop doing Roth conversions as part of your retirement planning after Senator Ron Wyden’s new legislation targeting specific retirement accounts? David McKnight breaks down the key aspects of the proposal and what it actually means for the average American (and their retirement). Show Notes In this episode, David McKnight looks at whether you should stop doing Roth conversions following Senator Ron Wyden’s introduction of legislation for taxing Roth IRAs. For David, 99.9% of Americans should continue investing in Roth accounts with a high degree of confidence. One of...
info_outlineShould every dollar go into a Roth 401(k) if taxes will be higher?
David McKnight reveals why that instinct could actually be one of the most expensive tax decisions a high-income earner can make when it comes to retirement planning.
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In this episode, David McKnight addresses two frequently asked questions: “If tax rates are going to be higher in the future, should I be putting every dollar into a Roth 401(k)?” and “Should I be converting as much of my IRA to Roth as quickly as possible?”.
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David believes that the current tax rates are as low as we’re likely to see in your lifetime.
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The national fiscal trajectory is apocalyptic: there is over $39 trillion in debt that’s going to increase by $2 trillion per year over the next 10 years, and over $200 trillion in unfunded obligations for Social Security, Medicare, and Medicaid.
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Despite all of this, politicians on both sides of the aisle seem unwilling to make the tough decisions necessary to address the crisis.
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Many people hear that taxes will be higher in the future and conclude that every retirement planning contribution should be immediately redirected into Roth accounts.
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However, if you’re a high-income earner contributing heavily into a Roth 401(k) today as part of your retirement planning may actually be one of the most expensive tax decisions you can make.
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When evaluating whether to contribute to a traditional 401(k) or a Roth 401(k), the question isn’t whether taxes will be higher in the future.
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Rather, it’s “Will my effective tax rate in retirement be higher than the tax rates I’m currently paying on the marginal dollar today?”.
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David discusses the so-called Retirement Income Valley, the period of time after your paycheck stops but before social security and RMDs fully kick in.
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An Ernst & Young study examining what happens when retirees allocate a portion of their retirement savings to a maximum-funded index universal life policy produced striking results.
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Researchers found that if you could divert 30% of your retirement contributions to an IUL with the goal of saving 3-5 years of living expenses by day one of retirement, it helps shield you from stock market volatility.
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David stresses that an IUL isn’t designed to replace the investment portion of your portfolio, rather to protect it.
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
The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement by David McKnight
PowerOfZero.com (free video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube