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By David McKnight
4.6
131131 ratings
The podcast currently has 346 episodes available.
David McKnight explains how a lack of knowledge about Roth 401(k) distribution rules can lead to unexpected taxes and penalties.
This episode dives into practical insights to help you steer clear of unwelcome surprises from the IRS.
David illustrates what happens if you withdraw from your Roth 401(k) before age 59½, and how these rules differ from those of a traditional Roth IRA.
He subsequently tackles the question of when post-59½ withdrawals of Roth 401(k) growth can be completely tax-free.
Roth 401(k) distributions can be confusing – especially if you’re planning to take funds before age 59½. And there’s an alternative you should consider.
Planning to use your Roth 401(k) as an emergency fund? “Think again!,” says David. He goes over why this may not be the best choice (and what to do instead).
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
In the past, David McKnight has been critical of gurus like Dave Ramsey. However, this episode looks at a video in which Ramsey seems to have slightly changed his views.
Ramsey emphasizes that one key benefit of a Roth IRA is the potential to drastically reduce or even eliminate Required Minimum Distributions (RMDs).
David explains that the decision to pursue a Roth conversion typically depends on whether you expect your future tax rate to be higher than it is today.
David discusses a missed opportunity in Ramsey's advice to a caller, highlighting a critical point Ramsey seems to have overlooked.
While David acknowledges a solid point made by Ramsey, he also identifies what he describes as "a huge blind spot in Ramsey’s worldview."
David highlights a "right move" by Ramsey – whether it’s a deliberate policy shift or Ramsey unintentionally cornering himself remains to be seen…
David praises Ramsey’s advocacy for Roth accounts, a sentiment he wholeheartedly agrees with.
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Dave Ramsey
David M. Walker
Ed Slott
Tom Hegna
Dr. Laurence Kotlikoff
Brian Bolan
Wade Pfau
In a recent video, real estate influencer Grant Cardone made some bold claims, advising against attending college, owning a home, and he even suggested that people should cash out their 401(k)s to invest in real estate.
David McKnight calls this advice irresponsible, dangerous, and lawsuit-worthy.
Far more Americans achieve millionaire status through consistent stock market investing than through real estate.
David shares a more sustainable approach to building wealth through homeownership that directly counters Cardone's anti-homeownership stance.
Cardone claims that 401(k) plans are designed to "imprison" people financially.
David digs deeper into the true purpose of retirement accounts and the importance of having an emergency fund.
There is one point where both David and Cardone align: the likelihood that future tax rates will be higher than they are today.
Finally, David touches upon the steep tax penalties of withdrawing from your 401(k) before age 59½ – an important consideration Cardone seems to overlook.
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Grant Cardone
This episode explores the easiest and most hassle-free way to achieve millionaire status.
According to Fidelity, the number of 401(k) millionaire accounts they manage has skyrocketed from 100,000 in 2017 to nearly 500,000 in 2024.
“The slow and steady approach to building wealth is the best way to become a millionaire today,” says David McKnight.
David explains why this method often outperforms owning real estate or running your own business when it comes to low-stress wealth accumulation.
He also delves into the stock market and the single greatest engine of wealth creation
Plus, David discusses one of the huge ways that makes 401(k)s a powerful wealth accumulation.
There are different ways to build wealth – each with its own “hassle factor”.
Directing your contributions to the Roth portion of your 401k is the best way to shield your 401k from the impact of taxes down the road.
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Fidelity
In this episode, Ben Shapiro shares his insights on the growing national debt and its potential trajectory under a Kamala Harris administration.
Shapiro provides a historical overview of U.S. interest payments, starting from the 1960s.
He highlights the alarming rise in the national debt, which has doubled in the last decade, and examines Harris’ proposed solutions to address it.
According to Shapiro, there are only two viable paths to resolve the debt crisis: significant economic growth or substantial cuts in government spending.
The primary drivers of the national debt, Shapiro explains, are interest payments, along with Medicare and Social Security obligations.
A Wall Street Journal article by Phil Graham and Jodey Arrington is referenced, citing welfare programs as a major contributor to the federal budget strain.
Shapiro argues that the U.S. economy would stagnate under a Kamala Harris presidency.
David McKnight offers a different perspective, arguing that Social Security, Medicare, and Medicaid are not the root causes of the debt crisis. He outlines the true factors behind the ballooning debt.
A recent study by Penn Wharton Business School challenges Shapiro’s views, suggesting that neither raising taxes nor cutting spending alone will prevent a financial collapse if the U.S. reaches 200% debt-to-GDP.
David also shares strategies to protect your retirement savings from potential tax increases.
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Ben Shapiro
Kamala Harris
CNBC
Federal Reserve
Joe Biden
Welfare Is What’s Eating the Budget (Wall Street Journal Article) by Phil Graham and Jodey Arrington
David Walker
Penn Wharton Business School
This episode answers the question, “How do I do a Roth conversion, and what forms do I need to fill out with the IRS?”
David explains that there are three basic steps to convert your IRA to a Roth IRA.
Carrying out these three steps will likely take a few weeks – the process could be slightly shorter if everything is handled by the same financial institution.
Starting this process in December isn’t ideal because financial institutions are often overwhelmed with conversion requests.
If the conversion isn’t completed by December 31st, the Roth conversion window will close, and you won’t be able to reopen it for that tax year.
David discusses when and why 100% of your IRA conversion may not be taxable.
He also touches on the different forms you’ll need to fill out, including instances where you may want to use form 8606.
As David puts it, “Double taxation is something you should avoid at all costs.”
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
This episode is part of David McKnight’s interview with Mark Byelich, founder and owner of Attleboro Wealth Management.
David and Mark discuss why the money inside a Life Insurance Retirement Plan (LIRP) "bucket" is treated differently for tax purposes and benefits from low fees.
When it comes to life insurance, David recommends "having as little of it as the IRS requires, and stuffing as much money into it as the IRS allows."
Remember: not all Indexed Universal Life (IUL) policies are created equal.
Starting an IUL is like getting married – it only works if it’s 'til death do you part.
Mark and David touch on the so-called IUL deal-breakers.
David is firm in his view: for LIRPs and IULs, you must ensure a 0% loan is guaranteed in the contract.
David also shares one of the biggest reasons his clients tend to favor an IUL.
Mark Byelich highlights a significant risk that he and his team monitor closely.
David and Mark discuss participating and variable loans, as well as interest in arrears – and David explains why he’s recently taken a step back from a particular approach.
David is a fan of the COMDEX rating, and he explains why, along with one of the Achilles' heels of life insurance policies.
Mark recommends reviewing your financial plan annually.
David shares why they only do business with companies that conduct daily or weekly sweeps.
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Mark Byelich
Genworth Cost of Long-Term Care
Dave Ramsey
Suze Orman
Moody’s
S&P
COMDEX rating
This episode looks at the recent IRS updates on the required minimum distributions due for 2024 and 2025.
David touches upon which accounts are and which aren’t subject to RMDs.
Historically, when someone missed their RMD, they had to pay a 50% penalty on whatever they were supposed to withdraw but did not…
David goes over what the new regulation for missing an RMD says.
David explains how SECURE Act 2.0 changed what was a popular policy in regards to RMDs and paying penalties.
To avoid confusion over penalties and various statutes of limitation, David recommends ensuring that you’re taking your RMDs at the appropriate time.
“If you consolidate all your IRAs into one account, it’s going to be a lot easier to make the correct RMD calculation,” says David.
Mentioned in this episode:
David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Secure Act 2.0
Today’s episode addresses how to create multiple tax-free income streams that don’t show up on the IRS’s radar and that contribute to you being in the 0% tax bracket in retirement.
Having some money in a tax-deferred account, like an IRA or 401k, is the first way high-income earners can create tax-free wealth for retirement.
Contributing to your Roth 401k or Roth 403b, as well as leveraging a backdoor Roth, are a couple of additional ways to build tax-free wealth in retirement.
David touches upon what CPA and retirement expert Ed Slott calls “the single greatest tax benefit in the IRS tax code.”
David makes a comparison between Indexed Universal Life vs. a taxable brokerage account.
David believes that “the higher your tax bracket, the more it makes sense to reposition surplus savings from your taxable account to indexed universal life.”
Mentioned in this episode: David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
Ed Slott
David starts the conversation by explaining what IRMAA is, if you should be worried about it when doing a Roth conversion, and whether there are ways around it.
David defines the acronym IRMAA, Income-Related Monthly Adjusted Amount. This is an additional charge you could be required to pay on your Medicare Part B premiums.
As your income goes up in retirement, your Medicare Part B premium increases with it.
David explains why standard deductions do not apply when calculating IRMAA.
What is the link between IRMAA and doing Roth conversions? Roth conversions are construed as part of your annual income in the IRMAA calculation.
David explains why you could do a Roth conversion before ever getting on Medicare and still end up paying that increased premium.
The IRS has a two-year look-back period when doing IRMAA calculations. So if you did a Roth conversion at age 63, for example, that would be included in the IRMAA income calculation at age 65 when you finally get on Medicare.
If Roth conversions could potentially cause IRMAA, should you avoid them altogether?
According to David, the answer is no--and that's because of two reasons.
First, if you don't do a Roth conversion, you could risk growing and compounding your IRA or 401K to the point where RMDs at 73 are so large that you could get hit with IRMAA every year for the rest of your life.
Secondly, tax rates will go up in the future. So you certainly don't want to forego a Roth conversion, only to pay much higher taxes on your IRA or 401k distributions down the road.
According to David, if you get enough Roth conversions done by the time you reach 63, you could avoid IRMAA altogether. Why? Because distributions from Roth IRA are not included in the IRMAA income formula.
By doing a Roth conversion and taking the IRMAA hit in the short term, you could put yourself in a position where you avoid IRMAA for the rest of your life and stay off the IRS's radar when it comes to Social Security taxation.
Mentioned in this episode: David’s upcoming book: The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back on Track
David's books: Power of Zero, Look Before You LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code
DavidMcKnight.com
DavidMcKnightBooks.com
PowerOfZero.com (free 3-part video series)
@mcknightandco on Twitter
@davidcmcknight on Instagram
David McKnight on YouTube
Get David's Tax-free Tool Kit at taxfreetoolkit.com
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