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 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 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 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

Dave Ramsey

George Kamel

Ernst & Young

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 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

Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David Walker

Penn Wharton