The Power Of Zero Show
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.
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How Gen Z Should Save for Retirement
05/01/2024
How Gen Z Should Save for Retirement
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 : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Why Ken Fisher Does NOT Want You to Do a Roth Conversion
04/24/2024
Why Ken Fisher Does NOT Want You to Do a Roth Conversion
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 : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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How Much of Your Social Security is REALLY Getting Taxed? (and At What Rate?)
04/17/2024
How Much of Your Social Security is REALLY Getting Taxed? (and At What Rate?)
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 : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Why Don't More Financial Advisors Recommend Indexed Universal Life?
04/10/2024
Why Don't More Financial Advisors Recommend Indexed Universal Life?
This episode addresses whether the mainstream financial planning community is justified in avoiding Indexed Universal Life. Lately, social media has been filled with videos praising the virtues of a financial tool known as Indexed Universal Life (IUL). David explains why the IUL has been taking such a beating from traditional financial planners. David discusses three different viewpoints against the IUL – including that of scammy salesmen on TikTok who often describe the IUL as “a stock market replacement on steroids.” Financial gurus tend to be jack of all trades but masters of none with IUL critiques that are either plain wrong or far too simplistic, says David. As a result of these groups’ cumulative efforts, IUL is widely viewed as a caricature of a financial product. David goes over how to objectively evaluate IUL on its merits and shares three of its positive utilizations as a dynamic financial tool. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Your Roth Conversion Roadmap for the Next 10 Years and Beyond
04/03/2024
Your Roth Conversion Roadmap for the Next 10 Years and Beyond
David discusses how much of your IRA you should convert, in what amounts and over what time frame. If you’re not convinced by the possible dramatic increase in tax rates in 2031 to bump you into the 32% bracket, you’re not alone… A whole battery of experts predict that tax rates will have to rise dramatically to help service the national debt and with the $200 trillion in shortfalls in Social Security, Medicare, and Medicaid. In Comeback America, former Comptroller General David Walker predicted that effective tax rates for all taxpayers need to double by 2030. David touches upon what would happen if the government doesn’t increase its taxes by 2043. David mentions what your Roth conversion roadmap should look like in the next 10 years – and beyond – if you have the lion’s share of your retirement savings in tax deferred accounts like IRAs and 401(k) plans. There’s one thing that you shouldn’t do before the “tax deadline.” You should not bump into the 32% tax bracket or higher. David goes over what he refers to as a “wait-and-see approach.” Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Clark Howard Says Fixed Indexed Annuities Stink! (My Response)
03/27/2024
Clark Howard Says Fixed Indexed Annuities Stink! (My Response)
David addresses Clark Howard’s viewpoint that seems to want to invite people to never consider a fixed index annuity. Despite interacting with thousands of financial advisors who offer fixed index annuities every year, David has never heard one of them describe them the same way as Clark Howard. Since financial gurus have to get their points across in short three-minute segments, they don’t have the luxury of nuance, says David. David explains how fixed index annuities actually work, and why you can’t lose money in a fixed index annuity in its simplest form. David touches upon the role of surrender charges and how Howard is wrong about them. In traditional stock market investing, you’re not supposed to withdraw more than 4% per year. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Is IUL the Dream Investment that Doug Andrew Claims?
03/20/2024
Is IUL the Dream Investment that Doug Andrew Claims?
Doug Andrew called the IUL a dream investment, but is it the silver bullet retirement account he claims it to be? David goes through Doug Andrew’s controversial remarks about IULs, and explains why he politely disagrees with his one-size-fits-all approach to index universal life. David explains why the 4% rule is a very expensive way to pay for retirement. He reveals why it's much more economical to guarantee your living expenses with a lifetime income annuity. If you only utilize the IUL, you will dramatically underperform the stock market over time. Furthermore, you won't be taking advantage of all the unique benefits each of the tax-free alternatives the IRS tax code affords you. The IUL should only be used as a complement to all these other streams of tax-free income, not a replacement for them. David goes through the characteristics that make the IUL a unique investment avenue. Would you rather adopt a retirement approach where you put every last dime of your retirement savings into an indexed universal life insurance policy? Or would you prefer your IUL to be just one component of a balanced, comprehensive approach to tax-free retirement? For David, the IUL is not the only way to grow your money productively over the course of a lifetime. When you have an experienced financial advisor shepherding you through the process, you can get extremely productive returns from the stock market. If you're younger than age 50, David recommends earmarking 30% of your retirement savings towards an IUL. Why 30% and not 100%? Because 30% is a much more balanced, math-corroborated approach to using the indexed universal life policy. The IUL is not a dream in a dream. It's merely a financial tool. When utilized in concert with all of the other available alternatives in the IRS tax code, it can help you create a balanced, comprehensive approach to tax-free retirement planning. David reveals why Wall Street wants you to believe that the stock market is the only solution to stress-free retirement planning. Most financial experts agree that tax rates in the future are likely to be higher than they are today. But that doesn't mean that you must reflexively default to putting all your retirement savings into an IUL. If you want to make money in the stock market, you're supposed to buy low and sell high. Unfortunately, most do-it-yourself investors do the exact opposite. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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The Two 5-Year Roth Rules Explained
03/13/2024
The Two 5-Year Roth Rules Explained
This episode explores the two different five-year rules for Roth IRAs instituted by the IRS to prevent people from abusing them. The first five-year rule applies to earnings on Roth contributions and determines whether those distributions can be taken tax-free. The second rule concerns Roth conversions and lets you know whether conversion principles can be accessed penalty-free. David explains that, for the purposes of the five-year rule, the clock starts the first time any money is contributed to a Roth IRA by either contribution or conversion. Once the five-year rule has been met, it’s been satisfied for good. Remember: any recent contribution to a Roth IRA can count as qualified tax-free distributions, even if they’ve been in the account for less than five years. David shares that Roth 401k plans have their own five-year rule, which is counted separately from a traditional Roth IRA. In case you’re unable to make a Roth contribution due to income limitations, you can make a non-deductible contribution to an IRA and then do a Roth conversion. Don’t forget that there aren’t income limits for IRA contributions. Dave discusses the fact that “the ordering rules for Roth IRA stipulate that withdrawals of after-tax contributions are made first, then conversions, and finally, earnings.” The Roth conversion five-year rule lets you know if you can access your converted principal penalty-free. The Roth contribution five-year period, on the other hand, lets you know if you can access your Roth earnings tax-free. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Warren Buffet Says AVOID Financial Advisors Like the Plague (Is He Right?)
03/06/2024
Warren Buffet Says AVOID Financial Advisors Like the Plague (Is He Right?)
At a recent Berkshire Hathaway annual shareholder meeting, Warren Buffett shared his thoughts on why he sees financial advisors as the worst people to trust with your money. Buffett believes that financial professionals in aggregate can’t do better than the aggregate of the people who just sit tight. David agrees with Buffett’s view on active versus passive investing. According to David, Buffett’s point of view and approach don’t account for the high cost of investor behavior. The fact that 90% of investment decisions are driven by emotions is a big problem David sees in Buffett’s line of thinking. David sheds light on what has become known as the Prospect Theory. What leads “DIY investors” to buy high and sell low, instead of buying low and selling high as logic would suggest? David shares his thoughts on the matter. Adopting an index-based, Do-It-Yourself, motion-driven approach to investing will make you less likely to remain invested during extreme market volatility. For David, one of the main purposes of a financial advisor is to hold your hand and keep you invested during jittery periods in the market. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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George Kamel Swings and Misses on Indexed Universal Life
02/28/2024
George Kamel Swings and Misses on Indexed Universal Life
George Kamel recently released a video on index universal life. On the surface, it looks like a ruthless exposé of a financial scam that millions of Americans are falling for. But when you scratch just below the surface, his critique of IUL is a steaming cesspool of half-truths and outright lies that are designed to sell you a term insurance policy through a Dave Ramsey-sponsored term insurance broker. According to Kamel, the IUL is a financial scam marketed as a secret wealth hack, yet in reality, it’s a money-eating monster. Yes, IULs are marketed by pretty scammy people on social media. However, there is a big difference between scammy life insurance agents and scammy life insurance products. IUL products are not created equal. It all depends on your personal situation and needs. Some products can be fantastic tools for building and protecting wealth and others can be catastrophic to your retirement. For David, not only does the IUL serve as an extremely competitive bond alternative, but it’s also a great volatility buffer in retirement. Financial gurus are not in the business of nuance. It’s all about making sweeping black-and-white characterizations that fit neatly into their tiny box. According to David, recent studies demonstrate that bonds are much more volatile and much more correlated to the stock market than was previously thought. David explains that fees are only a problem in the absence of value. And when utilized in the right context, an IUL provides value that you simply can’t get any other way. David explains how the IUL fees are a strength and not a liability that the uninformed life insurance critics make it out to be. When George says that the IUL is a money-eating monster, he’s only fixating on the fees in the early years of the contract. If he were to look at the average fees over the life of the program, a much different picture would emerge--one that paints the IUL as lower than the most cost-effective 401K plan. David goes through the things George gets wrong about the death benefit options in an IUL. The entire purpose of George’s video is not to educate you on the evils of an IUL. It's to get you to buy a term life insurance policy through Dave Ramsey’s endorsed broker of choice. George's ultimate goal is to get you to take the money that you might otherwise have allocated towards an index universal life policy and redirect it towards a term insurance policy from which Ramsey himself ultimately benefits. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Is Ken Fisher's Anti-Annuity Stance Illegal?
02/21/2024
Is Ken Fisher's Anti-Annuity Stance Illegal?
According to David, Ken Fisher’s hate toward annuities is visible in what can be considered “one of the most successful attacks on any financial product in history”. David discusses why, in his opinion, Ken Fisher sees annuities as the perfect marketing tool to build his own asset management firm. There are two things annuities can do that no other financial product can – David explains what they are. Academic studies that go back to the early 1960s seem to suggest that annuities are the best way to maximize retirement income. There appears to be a massive information gap facing a generation of retirees who are unaware of the value annuities can play in helping them spend more income in retirement. David shares an example by Dr. Michael Finke, one of the foremost experts on the benefits of guaranteed lifetime income. David touches upon whether what Ken Fisher is doing can be considered illegal. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Suze Orman vs. Dave Ramsey on Sustainable Withdrawal Rates in Retirement
02/14/2024
Suze Orman vs. Dave Ramsey on Sustainable Withdrawal Rates in Retirement
Financial expert and author Ric Edelman has stated that, in his opinion, anyone following Dave Ramsey’s 8% retirement withdrawal strategy is…doomed! The 4% rule has been the distribution rates’ gold standard for over 30 years. However, Suze Orman said that she wouldn’t use the 4% rule on any level. David touches upon what he considers a “massive unintended consequence” of adopting Suze Orman’s 3% withdrawal rate in retirement. According to David, there isn’t a winner between a 3%, a 4%, and an 8% retirement withdrawal strategy. He gives a couple of examples that illustrate why that’s the case. David believes that, to get the best bang for your buck with the highest success rate over a 30-year retirement, a guaranteed lifetime income annuity is – almost always – the best way to go. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Is a 100% Tax-Free Retirement Really Possible?
02/07/2024
Is a 100% Tax-Free Retirement Really Possible?
A recent Penn Wharton study found that the federal government will have to dramatically raise taxes within the next 20 years to avoid sliding into a debt spiral of high interest rates and debt payments. Former comptroller General David Walker has stated several times that taxes would have to double by 2030 or the U.S. will go broke as a nation. When it comes to retirement savings accounts, the federal government typically gives people a choice between paying taxes at the time of contribution or paying them on your distribution years down the road. A big advantage of contributing to a Roth IRA is that you’d be paying taxes at today’s historically low tax rates. David thinks that believing Walker and the Penn Wharton study means accumulating the lion’s share of your retirement savings in tax-free vehicles like Roth IRAs and Roth 401ks. David shares the approach he recommends having when it comes to Roth Conversions. The Roth 401k is one of David’s favorite tax-free investments – he explains why. For David, the real allure of the LIRP is that it provides a death benefit that you can receive in advance of your death for the purpose of paying for long-term care. David lists the pieces of the puzzle that make for a balanced and comprehensive approach to tax-free retirement. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at study:
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A Recent Penn Wharton Study Says that the U.S. has 20 Years to Fix Debt or Face Cataclysm
01/31/2024
A Recent Penn Wharton Study Says that the U.S. has 20 Years to Fix Debt or Face Cataclysm
Former comptroller general of the federal government, David Walker, believes that tax rates will have to double, in order to avoid a financial collapse. The U.S. Government should be helped in preventing their growth. David McKnight points out a potential course of action that should be followed to avoid a possible financial collapse. Permanent solutions to stabilize the debt outlook are needed now…not 20 years from now when the crisis is already upon us. David touches upon the role that higher federal taxes and lower spending may have. What’s the best tool to shield yourself from the coming tax apocalypse? David knows and shares it on the show. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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How to Figure Out How Much Money to Save for Retirement
01/24/2024
How to Figure Out How Much Money to Save for Retirement
Today’s episode is part 4 of David’s interview for Jesse Wright’s podcast, and it addresses the best way to figure out how much money you’ll need to be able to retire. David explains how to be able to identify what your retirement shortfall is going to be. There are different approaches and each one comes with its unique traits – David discusses his favorite. Citing Suze Orman, David shares his thoughts on what the new retirement age should be. Jesse and David touch upon living abroad while in retirement, what that actually entails, and Act 60. David shares his experience living in Puerto Rico, and shares his #1 actionable retirement planning tip for people in their 50s. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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The Best Way to Make Sure Your Money Lasts as Long as You Do
01/17/2024
The Best Way to Make Sure Your Money Lasts as Long as You Do
Today’s episode is part three of David’s interview on Jesse Wright’s podcast. They discuss the best way to ensure your savings last as long as you do. Jesse shares a shocking stat: 65-year-old married couples have an 18% chance that at least one person in the relationship will live to be 95 years old. This means that there is a very real chance that at least one of them will outlive their savings. For David, most Americans outlive their savings because they don’t save or invest enough to fund a 30-year retirement. The majority of people who save enough are also at risk of running out of money because they’re not managing their money well enough in retirement. David defines sequence of return risk and how market declines in the early years of retirement could significantly reduce the longevity of your savings. David talks about the benefits of owning annuities as well as the ones that work best for retirement planning. According to David, the biggest mistake people make in retirement is having all their savings in tax-deferred accounts by the time they retire. The name of the game is not just saving enough by the time you retire, but distributing in a way that your savings last through your actuarial life expectancy. The 4% rule is hard to follow because it only works if you can constrain yourself to 4% each and every year of retirement. If you can constrain yourself to 4% distributions adjusted for inflation in retirement, you have an 86% chance that your money will last through life expectancy. Every time you take out more than 4%, that success rate drops like a rock. The assumptions we use in our retirement plans are important and have real life implications if we use the wrong assumptions. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Exposing the IUL TikTok Trap
01/10/2024
Exposing the IUL TikTok Trap
Today’s episode is the second part of David’s interview for Jesse Wright’s podcast. Beware of what you see on social media, says David. A lot of that content is by wayward life insurance agents employing pretty despicable tactics. David shares an example of bad advice and highlights why this is advice you should stay away from. For David, 99% of TikTok videos misrepresent what the IUL can do and the role it should play in your retirement. David explains why an IUL is sort of like getting married, including the “until death do you part” side of things. It’s important to get to the 0% tax bracket and to shield yourself from the impact of higher taxes…but getting help from someone who has experience is just as important. David points out two traits you would want your financial advisor to have as you plan for your retirement. David goes over what he considers a balanced and comprehensive approach to tax-free retirement planning. Many people forget that not all of the money that’s growing in your 401k is accruing to your benefit. A portion of that belongs to the IRS. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Expert Warns Your Effective Tax Rate Could Double by 2030
01/03/2024
Expert Warns Your Effective Tax Rate Could Double by 2030
Today’s episode is part 1 of David’s appearance on Jesse Wright’s podcast. Jesse asks David where one should start from when thinking about retirement. David points out that the types of accounts which one saves money for retirement really matter. According to David, there’s essentially two ways to save money for retirement. The first is to get a tax deduction today. The second is to pay the tax today and invest your money so that, in the future, you’ll be able to take that money out tax-free. David goes over why he wrote The Power of Zero back in 2014. One key question David believes people should ask themselves is whether their tax rate is likely to be higher today or in 20 years. For Former Comptroller General David Walker, the 20% of the income Americans are paying between federal, state, and local taxes, could go up to 40% by 2030. David believes that the farther out your investment horizon and retirement date, the more critical it is for you to invest in tax-free accounts like Roth IRAs, Roth Conversions, etc. David recommends planning for 50% tax rates and explains that there are three basic types of account to save money for retirement. These three buckets are: the so-called taxable bucket, the tax-deferred bucket, and the tax-free bucket. David goes over the characteristics of each bucket. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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HonestMath.com Weighs In on Dave Ramsey's Epic Meltdown Over the 4% Rule
12/27/2023
HonestMath.com Weighs In on Dave Ramsey's Epic Meltdown Over the 4% Rule
David and Khalen Dwyer discuss HonestMath.com's research proposing a conservative 4% annual withdrawal for a 30-year retirement--contradicting Ramsey's long-standing advice of an 8% withdrawal rate. Khalen explains how Ramsey's assumptions defy both mathematical principles and historical data. He also reveals the financial instability retirees may face when following Ramsey's controversial 8% withdrawal rate. Khalen and David agree that the primary job of an advisor is to help investors set reasonable expectations. If doing that means the advisor is a hope stealer, then advisors can wear the hope stealer’s badge with pride. The first three to five years of retirement are very important and can set the economic tone for the rest of your retirement. For Khalen, investors must realize that their risk appetite might change as they get closer to retirement. The closer you get to retirement, the more your need to protect accumulated savings becomes more critical, as there is less time to recover from significant market downturns. When you’re 100% invested in stocks, the swings in the market tend to be much wider, and that exacerbates the sequence of return risk for the investor. David adds that poor investment performance during the initial years of retirement can deplete the portfolio more quickly than anticipated. Retirees who experience market downturns in the early years of their retirement and withdraw a higher percentage of their portfolio to cover living expenses might accelerate the depletion of the portfolio. Even if the market rebounds in later years, the portfolio may struggle to recover because the initial losses reduce the base from which subsequent returns are generated. Khalen highlights the substantial risk associated with an 8% withdrawal rate using real-life examples and historical data. David and Khalen question Ramsey's aversion to bonds and insistence on a 100% stock allocation. They discuss the psychological impact of market volatility in retirement, the importance of investing in bonds for portfolio stability, and why Ramsey's all-stock approach just doesn’t make sense. According to Khalen, one of the most important aspects of retirement planning is addressing the sequence of return risk. The sequence of returns risk is the risk of experiencing poor investment performance, particularly negative returns, in the early years of retirement. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at on Twitter on LinkedIn
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The Worst IUL TikTok Video You’ve Ever Seen (Financial Malpractice on FULL Display)
12/20/2023
The Worst IUL TikTok Video You’ve Ever Seen (Financial Malpractice on FULL Display)
David makes a clear preface: “If anyone ever tells you to cash out your 401k and put it all into an IUL, you’re to turn around and run the other way!” This episode addresses what David refers to as “the worst IUL TikTok video I’ve ever seen; a video that’s so replete with manipulative sales tactics and lawsuit-worthy financial advice.” David points out one of the manipulative sales strategies included in the video: making the prospect feel as if she needs help by making her feel confused and overwhelmed by the number of alternatives. “Cash now vs. an awesome retirement plan later” is another unethical tactic David discusses. Beware: if you don’t liquidate your 401k prior to 59 and a half you’ll incur a 10% penalty. Need to liquidate your 401k before then? Don’t do it all in one year. Otherwise, all of that money would be realized as income and taxed at your highest marginal tax bracket – all in the same tax year. Remember: closing out your 401k and stopping contributions will lead to you no longer receiving the company match. Over the course of your retirement, this last point will end up costing you hundreds of thousands of dollars. David stresses the lack of relevant questions being asked by the financial advisor featured in the TikTok video. David deems the video to be one of the worst cases of IUL malfeasance he’s ever seen on social media. Moreover, he believes that advisors like the one in the video should be outlawed and fined. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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How to Take SUSTAINABLE 8% Withdrawal Rates in Retirement (Not the Dave Ramsey Way)
12/13/2023
How to Take SUSTAINABLE 8% Withdrawal Rates in Retirement (Not the Dave Ramsey Way)
One of the things Dave Ramsey is famous for is telling his audience that they can take sustainable 8% distributions from their stock market portfolios in retirement. David has two issues with this recommendation: it ignores reams of academic data on sustainable withdrawal rates, as well as the concept of sequence of return. David points out the potential repercussions of following Ramsey’s approach. According to the mainstream financial community, 4% is the actual “golden rule” for sustainable distribution rates in retirement. Ramsey has long complained about the 4% rule being a pretty expensive way to go… David illustrates a key problem with an 8% withdrawal rate and discusses the role of a volatility shield. David explains that the money you can put in a volatility shield has to grow tax-free and allow for tax-free distributions. It’s possible to increase your sustainable withdrawal rate on your stock portfolio to as high as 8%, with a 95% chance of never running out of money – David explains how. On an apple-to-apples basis, guaranteed lifetime income annuities give you a much higher income than living by the 4% rule in retirement. Following this Dave Ramsey strategy? David believes that it’s likely going to force you to run out of money 15-20 years in advance of life expectancy. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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How to Become a Tax-Free Millionaire (with Tom Hegna)
12/06/2023
How to Become a Tax-Free Millionaire (with Tom Hegna)
David talks to Tom Hegna, an economist, author, and popular industry speaker considered by many to be the retirement income expert. David reveals how he learned about the unstable fiscal trajectory of the U.S. and why he wrote the book, "The Power of Zero." The book emphasizes the importance of preparing for higher tax rates. It offers strategies to help you protect your retirement savings against the impact of potentially higher tax rates in the future. David talks about teaching financial principles to his children--tithe 10%, save 20%, spend the remaining 70%. Did you know Americans have 95% of their accumulated retirement dollars in IRAs and 401Ks? It’s great that Americans are saving for retirement but the downside to this strategy is that traditional IRAs and 401Ks are tax-deferred. Taxes are deferred until the funds are withdrawn. Meaning you’ll potentially pay more in taxes in retirement. David reveals why it’s okay to preemptively pay taxes before the IRS absolutely requires it of you. Tips for individuals in their 20s and 30s on how to save and invest in tax-free accounts. Why it’s never a good idea to spend most of your income on depreciating assets. David shares how his system for investing differs from mainstream financial advice. Tom and David agree that people cannot become wealthy by borrowing money to put into depreciating assets. David’s investing principle is built on a simple formula: start saving money as early as today, put it in tax-free accounts, do it consistently for 40 years, wait, and you’ll have a great retirement. According to David, whatever you decide to do in college, someone has to be willing to pay you money in exchange for the services you provide. The longer your investment horizon, the more likely your taxes will be higher in the future. Not only do you need to start investing early, you also need to invest tax-free. Remember, the longer your investment horizon, the more it makes sense for you to invest in tax-free accounts. We are marching into a future where the cost of servicing the national debt will consume the entire federal budget. When this happens, David believes the Federal Reserve will be forced to raise taxes or risk going bankrupt. So, how can Americans protect themselves from the risk of rising taxes? First, acknowledge that taxes will be higher in the future, invest early, and start investing in tax-free accounts. David and Tom share their thoughts on why permanent life insurance is by far the best tax benefit in the IRS tax code. David announces his upcoming book, "Guru: Why Financial Gurus Are Leading You Astray and How to Get Back on Track," which critiques mainstream financial advice and offers a more personalized approach to tax-free investing. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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The Caller on Dave Ramsey's Viral 4% Rule Meltdown Speaks Out! (My Interview with Jay Disberger)
11/29/2023
The Caller on Dave Ramsey's Viral 4% Rule Meltdown Speaks Out! (My Interview with Jay Disberger)
David talks to Jay Disberger, the caller on Dave Ramsey's viral 4% rule meltdown. They start the discussion by describing why the clip went viral and how people can get their questions answered live on the Dave Ramsey Show. Jay's motivation for the call: To get clarity on how best to withdraw your money in retirement and get Dave to take a stand on sustainable withdrawal in retirement. Jay shares his journey to finance coaching and saving for retirement. David and Jay discuss why George Kamel was right about the 4% withdrawal strategy and why Dave Ramsey's 8% withdrawal rate is misleading. Why Dave Ramsey is not a huge fan of the 4% rule or the people who preach it — He believes it's too low and unrealistic. You don't need to withdraw 4% of your savings for your nest egg to survive. According to Dave Ramsey, you're missing out on a big opportunity if you only withdraw 4% from an investment portfolio earning 12%. David and Jay agree that Dave Ramsey lives in a fantasy world where he thinks stratospheric distribution rates are sustainable in retirement. The biggest issue with an 8% withdrawal rate is that it doesn't account for market volatility. Just because you average 12% per year doesn't mean you're guaranteed 12% returns yearly. The only way to have a productive conversation with people who don't think they can be wrong is to ask them open-ended questions in the hope that they come to the conclusion themselves. According to David, we live in a world where anything you say that flies in the face of reason will be clipped and posted online. Dave Ramsey does a great job of motivating people to get out of debt and get on the path of financial independence. The problem lies in his absurd retirement planning advice. The biggest problem with Dave Ramsey is that he's not very nimble when it comes to changing his thoughts according to new research and data. Jay and David agree that the 4% rule is not for everyone, but it's also not sustainable to follow the 8% rule. Jay reveals what he would tell Dave Ramsey if he ever got the opportunity to talk to him again. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Dave Ramsey Eviscerates Co-Host George Kamel for Preaching the 4% Rule
11/22/2023
Dave Ramsey Eviscerates Co-Host George Kamel for Preaching the 4% Rule
Dave Ramsey recently eviscerated his co-host George Kamel for preaching the 4% rule. According to George, withdrawing only 4% of your savings is the easiest way to guarantee your money lasts throughout retirement. George further adds that the 4% rule is a math-based approach to sustainable withdrawals in retirement. For Dave Ramsey, the 4% is senseless and only geared toward stealing people’s hope for a brighter retirement. He believes an 8% withdrawal rate is more sustainable since your savings will be growing at a rate of 12%; factor in 4% for inflation, and you’re left with 8%. It’s clear Dave Ramsey is oblivious to the sequence of return risk, which could force you to run out of money 15 to 20 years early if you experience a series of negative returns in the first decade of retirement. The fact is, even if you average 12% rates of return throughout retirement, you won’t be getting 12% every single year. Some years, you’ll get 20%, and other years you’ll get -26%. David explains that the 4% rule gives you peace of mind that regardless of the swings in the market, you’ll have a reasonably high chance of not outliving your money. Because Ramsey has millions of dollars, he has the license to utilize planning assumptions that are wildly at odds with history and academic research. If you’d like a stress-free retirement, ignore Dave Ramsey’s advice and embrace strategies that are built on sustainable retirement planning principles like the 4% rule. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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The Three Types of Tax-free Retirement Advisors (And Which One’s the BEST for You)
11/15/2023
The Three Types of Tax-free Retirement Advisors (And Which One’s the BEST for You)
David talks about the three main types of tax-free retirement advisors and the one that will guarantee a hassle-free retirement. The first type of advisor is the TikTok advisor. This is the advisor who will preach the prospect of dramatically higher tax rates in the future. The only downside to their message is that they believe the only way to shield yourself from the rising tax rates is to put all your retirement savings into an IUL. If you believe in a balanced and comprehensive approach to retirement planning, steer clear of these types of advisors. It’s unwise to build a retirement plan on the foundation of an IUlL and exclude every tax-free alternative in the tax code. The second type of advisor is the one who believes in tax-free retirement planning but is not acquainted with the data that proves tax rates will rise dramatically in the future. If you are interested in shielding your assets against the impact of higher taxes, avoid these types of advisors like your retirement depends on it. Because it does. The third type of advisor is knowledgeable on data that proves tax rates will dramatically rise in the future and advocates for a balanced, comprehensive approach to tax-free retirement. If you believe that tax rates in the future will be dramatically higher than they are today, then you also need to recognize that not all financial advisors are equally equipped to help shield your retirement savings from those higher taxes. Your job as an investor is to get an advisor who understands the unique fiscal challenges facing our country and understands that the best way to protect yourself from those challenges is to implement a balanced, comprehensive approach to tax-free retirement. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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How to Get Rich the Dave Ramsey Way! (Hint: 10% Withdrawals in Retirement)
11/08/2023
How to Get Rich the Dave Ramsey Way! (Hint: 10% Withdrawals in Retirement)
David breaks down a recent Dave Ramsey interview where he advised a 50-year-old widow on the best way to save, invest, and withdraw her retirement savings. According to Ramsey, if the lady invests $1000 every month for 15 years, she will have accumulated $500,000, which gives her permission to withdraw 10% of her savings every year for the rest of her life. The problem with this recommendation is that she will likely earn 9% returns per year, not 12%. She is also more likely to run out of money before running out of life if she withdraws 10% of her savings every year. The gaping hole in Dave Ramsey’s investment approach is that he seems to have a limited understanding of the sequence of return risk. This is the order in which you experience investment returns in retirement. Generally, it’s safe to show future returns based on a historical track record consistent with your future investment horizon. For example, if you want to know what rates of return you’ll likely experience in the next 15 years in the S&P 500, you need to look at how the index performed in the past 15 years. According to David, Ramsey’s overly inflated retirement variables are setting his listeners up for failure. By inflating his assumptions, Dave Ramsey gives his listeners an overly optimistic view of how much money they must save to reach their retirement goals. But why does Dave Ramsey have such a flawed view of retirement planning? David believes it comes down to two things: Dave Ramsey likes to portray himself as the retirement planning outsider who is at war with the mainstream financial planning community. He believes that if he can show his followers lucrative investment projections, more of them will sign up for his financial independence programs. Don’t be seduced by Ramsey’s inflated rates of return or his massive withdrawal rate assumptions. You’re much better off using a 9% rate of return and a 4% sustainable distribution in retirement. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Complete Your Roth Conversion by THIS Date or LOSE!
11/01/2023
Complete Your Roth Conversion by THIS Date or LOSE!
Today’s episode is part three of David’s interview with Power of Zero Advisor Terry DuPont. Trump tax cuts were not permanent – David explains why 2026 is going to be a key year for that. In his book Comeback America, former Comptroller General David Walker predicted that, by 2023, tax rates would have to double – or more – to keep the U.S. solvent. David shares what he believes people should do in the next few years as the country approaches an “apocalyptic” scenario. Terry DuPont is amazed by the fact that families and individuals don’t seem to understand the fact that the largest expense in their lifetime will continue to be the same. According to Terry, the main issue is that people don’t calculate that expense into their future. Terry asks David about the one thing he knows now that he wishes he knew when he started. David opens up about the role David Walker has played in his journey as well as about his definition of success. David warns people against letting a year go by without taking advantage of historically-low tax rates. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at (2009 CNN article by David Walker) (2008 documentary featuring David Walker)
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What your Financial Advisor Is NOT Telling You About Roth Conversions
10/25/2023
What your Financial Advisor Is NOT Telling You About Roth Conversions
Today’s episode is part two of David’s interview with Power of Zero Advisor Terry DuPont. David talks about the approach many major money management institutions follow, and how it differs from how David and Terry do things. There are situations where large money management institutions forbid their advisors from ever bringing up, for example, Roth conversions. David invites listeners to browse the web trying to find a Ken Fisher article discussing the benefits of a Roth conversion. David discusses what makes the Power of Zero approach stand out in the financial planning industry. People seem to be hungering for real solid strategies that can help insulate them from the impact of rising taxes, says David. David lists a few reasons why the advice people may get from gurus like Dave Ramsey or find on platforms like TikTok isn’t useful. David recommends having a balanced and comprehensive approach to tax-free retirement that takes advantage of all the nooks and crannies in the IRS tax code. There are different things David likes about Roth IRAs, Roth 401ks, Roth Conversions, Life Insurance Retirement Plans, and tax-free social security – he touches upon them. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Why Cash Value Life Insurance is EXPLODING in Popularity (Despite What Critics Say)
10/18/2023
Why Cash Value Life Insurance is EXPLODING in Popularity (Despite What Critics Say)
Today’s episode features some of the highlights of David’s appearance on the Your Money with David Hays podcast. David touches upon what he would focus on and how long he believes he would last if he were president of the U.S.. David’s next book will probably have the title Guru. For a while, David Hays has half-jokingly said that he would accept the responsibility of mayor. David introduces two perspectives into the picture: the point of view of financial gurus like Dave Ramsey and Suze Orman, and that of Ed Slott – whom USA Today dubbed “America’s IRA Expert.” Many people underestimate the financial costs of long-term care for their parents, spouse, or partner, says David. David illustrates the traditional way to approach long-term care and what would make the most sense for those thinking about it for their loved ones. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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Dave Ramsey Beat the S&P 500 Over the Last 30 Years Because “It’s not hard to do.”
10/11/2023
Dave Ramsey Beat the S&P 500 Over the Last 30 Years Because “It’s not hard to do.”
In a recent interview, Dave Ramsey claimed he beat the S&P 500 over the last 30 years because “it’s not hard to do.” The big question is, is it really that easy to beat the S&P 500 over time? According to David, it’s not. In fact, most active fund managers fail to do it over time. A recent study revealed that 85% of fund managers underperformed in the S&P 500 in the last ten years - this underperformance caused the disappearance of mutual funds altogether. Based on these stats, how do we rate Dave Ramsey’s claims that he outperformed the index by 12% and 13% in some years? David believes it’s not advisable to collect all your money and move the index fund route. The first step should be seeking the services of a financial advisor. Good financial advisors will more than offset whatever fees they charge you in the form of enhanced returns that stem from sticking to your investment goals. Unfortunately, most investors let their emotions undermine their investment decisions. We’re supposed to buy low and sell high, but most investors do the opposite. Fuelled by emotion, they buy high and sell low. For David, a good financial advisor will help protect you from yourself and remind you of the plan you created and why you need to stay on track toward your goals. It doesn’t matter how much money you have. It only matters how much you actually get to spend after taxes. The three main takeaways from Dave Ramsey’s claims about beating the S&P 500: Take everything Dave Ramsey says with a grain of salt. His entire business is built on making investing seem easier than it actually is. Beating the S&P 500 is not as easy as Dave Ramsey claims. You need a qualified financial advisor to help you yield much higher returns over time to increase the likelihood that your life savings will last through life expectancy. Mentioned in this episode: David's : Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code (free 3-part video series) on Twitter on Instagram on YouTube Get David's Tax-free Tool Kit at
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