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

This episode addresses Suze Orman’s epic IUL rant on her Women and Money podcast.

Suze Orman begged her audience not to do Index Universal Life insurance policies.

This very broad brush and no nuance approach of every financial guru is what David’s upcoming book The Guru Gap touches upon.

David explains why the generic approach financial gurus tend to have is leading people astray.

David brings up Orman’s advice to one of her listeners who has been investing $200/month into an IUL policy.

David recreated this listener’s exact policy through one of the top IUL carriers in the industry – he shares his findings.

Starting an IUL is like getting married: it only really works if you plan on keeping it until death do you part.

David goes over the reason why IUL should be the last bucket to turn to for liquidity in the early years. 

These days, most IUL carriers these days allow you to receive your death benefits in advance for the purpose of paying for long-term care.

David believes that “an IUL can serve as a great volatility shield in retirement”.

A recent Ernst & Young study showed how people can dramatically increase their sustainable levels of income in retirement in the context of IULs.

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

Suze Orman’s Women and Money Podcast

Ernst & Young

David and Mark Byelich talk about why people don’t want to pay a tax before the IRS absolutely requires it of them.

David touches on the 2018 documentary The Power of Zero: The Tax Train is Coming.

Mark Byelich explains that the longer someone hasa tail of the overage in their IRA hanging out there, the more risk they have.

Mark discusses what happens in financial planning when people ease. 

When it comes to people around the country, the initial tax payment is typically the thing that’s really hard to get over.

David shares what tends to occur when people get over the “shock” of paying that initial tax.

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

The Power of Zero: The Tax Train is Coming 

Doug Orchard 

George Shultz 

Ed Slott

Today’s episode is part of David’s interview with Mark Byelich.

David and Mark address Mark’s concept of “suddenly single”.

David once met an Uber driver who had saved $1.5M. All financial advisors gave him the same advice “don’t change anything” but David had something different to share.

A Roth conversion is something married couples should consider to avoid being automatically catapulted into the 22% or 24% tax bracket if one spouse dies.

David breaks down the thought process behind considering a Roth conversion even if you feel like you’ve done everything right.

Mark and David touch upon the potential challenges of inheriting an IRA from your parents – and the two types of people who typically inherit them.

You may think “I’m never going to be in any bracket other than the 10% or 12%”. But think about what would happen to your heirs if you passed away, says David.

David sees the Roth conversion as the single greatest tool that’s available to you today to be able to maximize the amount of money that your kids are going to be able to spend.

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

This episode addresses the 8-step plan for a successful retirement plan that was recently shared by Dave Ramsey’s “sidekick,” George Kamel.

Just like in any field of life, a good financial plan benefits from assessing where you are, where you want to be by a given date, and what needs to be done to get there.

David dislikes the approach of painting everything with a broad brush and characterizing niche financial planning principles in broad, one-size-fits-all financial planning terms.

That’s what, in his opinion, many so-called “financial gurus” like Dave Rasmey tend to do.

David mentions his upcoming book, The Guru Gap: How America’s Financial Gurus Are Leading You Astray, and How to Get Back On Track.

George Kamel has found that 8 out of 10 millionaires have reached their millionaire status by investing in their company’s 401k plan. 

David shares his philosophy: “If you’re in a 24% bracket or lower, opt for the Roth 401k. If you’re in the 32% bracket or higher, stick with the traditional 401k.”

David contradicts Kamel and explains that the reason you invest in a Roth IRA is because you think that your tax bracket in retirement is likely to be higher than it is today.

For David, when it comes to millionaires who have paid off their homes, it’s important to distinguish between causation and correlation.

A problem with Kamel’s view on Social Security is that Social Security is likely to never go away. What may happen, says David, is that the retirement age will be changed.

Kamel and David are in agreement: investing is a marathon, not a sprint – and it isn’t for the faint of heart.

According to an April 2024 study by Dalbar, investors continue to be their own worst enemies when it comes to saving for retirement.

Except for step 5, David sees George Kamel’s 8-step plan as a pretty sound solution.

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

George Kamel

David M. Walker

Dalbar’s QAIB

Today’s video comes from David’s interview with Dave Christy.

They discuss how life insurance and annuities can help maximize your retirement. 

They start by describing the three different ways cash value life insurance can positively impact your financial plan. 

David reveals how IULs can be an excellent replacement for the bond portion of your portfolio. 

David explains why most people get heartburn when they think about paying for traditional long-term care. 

David goes over the unique aspects of cash value life insurance--if you ever need long-term care, the insurer will start paying your benefits in advance of your death to pay for long-term care. 

David covers how cash value life insurance can extend the life of your investments when it comes to sustainable withdrawals in retirement. 

According to David, the problem with the 4% Rule is that it's an expensive way of mitigating longevity risk. 

David describes how cash-value life insurance works and why it's an excellent volatility shield in retirement.

When you utilize cash value life insurance, annuities, and traditional investing together, you will yield higher income in retirement than any other alternative. 

Dave defines prudent asset allocation and how to use it to protect your retirement.

They both agree that the number one rule to being a successful investor is to not sell things when your investments are down. 

For David, every investor should aim to accumulate three to five years worth of living expenses in their cash value life insurance by day one of retirement. 

The IUL is not a stock market replacement. But it will give you more productive returns than a whole life policy.

Mentioned in this episode:

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

Today’s video is part three of David’s interview with Dave Hall.

They discuss whether Trump will extend the tax cuts if re-elected. 

David cites a recent report from the Committee for a Responsible Federal Budget that says that if they extend the tax cuts, the government will have to borrow $5 trillion to pay for those tax cuts. 

David explains why he doesn’t see another tax cut happening without a commensurate reduction in spending. 

David tackles people’s assumptions that tax cuts can stimulate enough economic growth to be able to pay for themselves.

Dave and David agree that more people are starting to come to terms with the fact that taxes will go up in the future. 

David explains why individual investors need to be realistic about the types of tax rates they're likely to pay down the road. 

David shares his thoughts on whether the Inflation Reduction Act was successful in bringing inflation down and cutting government spending. 

Why you need to take advantage of historically low tax rates today and protect your retirement before tax rates go up for good. 

David covers the benefits of taking advantage of historically low tax rates while they're still around and why you need to get your savings systematically repositioned to tax-free.

Dave talks about doubling taxes and how they could easily ruin retirements that would have otherwise worked out well.

Politicians are in the business of getting re-elected. That is their number one job. You may think their number one job is to represent you, but their number one job is to get re-elected.

Mentioned in this episode:

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