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The Power Of Zero Show

The Power Of Zero Show

By: David McKnight
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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.The Power Of Zero Economics Personal Finance
Episodes
  • How Roth Conversions Affect Social Security Taxes and IRMAA

    How Roth Conversions Affect Social Security Taxes and IRMAA
    May 13 2026

    David McKnight dissects a topic that causes a lot of confusion for retirees and pre-retirees: How Roth conversions affect social security taxation and Medicare premiums (IRMAA).

    Some warn against Roth conversions in retirement as they can cause your Social Security to become taxable and could also raise your Medicare premiums.

    While that's true, David believes that the long-term benefits of Roth conversions can far outweigh the temporary, short-term pain they can cause.

    In order to determine whether your Social Security benefits will be taxed, the IRS tracks the so-called provisional income.

    If you perform a Roth conversion after you begin collecting Social Security, that additional income can push you above certain thresholds that cause your Social Security benefits to become taxable.

    Medicare premiums are also influenced by your income through IRMAA (Income-Related Monthly Adjustment Amount), and they look at your income from two years earlier to determine your IRMAA bracket,

    Remember: A Roth conversion today could trigger higher Medicare premiums two years from now.

    David also explains that Roth withdrawals are not included in provisional income.

    Not only do they not cause your Social Security benefits to become taxable, but they also do not count towards the income thresholds that trigger higher Medicare premiums.

    As David points out, with the approach discussed in this episode, you're essentially compressing the tax pain into a few years, so you can enjoy decades of tax-free income later on.

    The national debt continues to spiral out of control to the point where economists are now predicting massive tax increases within the next 10 to 20 years.

    If such predictions are accurate, the people who will benefit most are those who have already shifted large portions of their retirement savings into tax-free accounts like Roth IRAs.

    By performing Roth conversions today – while tax rates are historically low – you're effectively locking in today's tax rates and protecting yourself from the possibility of much higher rates down the road.

    When talking about Roth conversions affecting Social Security taxation and IRMAA, we have to remember that those impacts are temporary, while the tax-free benefits can last for the rest of your life.

    David touches upon two reasons why it may make sense to delay taking Social Security while you're performing Roth conversions.

    Increasing the likelihood that your money will last as long as you do should be the #1 goal of every retirement plan.

    Mentioned in this episode:

    David's new book: The Secret Order of Millionaires

    David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track

    Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight

    DavidMcKnight.com

    DavidMcKnightBooks.com

    PowerOfZero.com (free 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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    8 mins
  • How to Protect Against a Market Crash in the First Ten Years of Retirement

    How to Protect Against a Market Crash in the First Ten Years of Retirement
    May 6 2026

    David McKnight addresses one of the biggest threats to your retirement plan: sequence of returns risk.

    Are you retired or within 10 years of retirement? Sequence of returns risk may be the single most important concept you need to understand if you want to ensure your money lasts as long as you do.

    Sequence of returns risk refers to the danger of experiencing a market downturn early in retirement while you're simultaneously taking withdrawals from your portfolio.

    David explains why this risk is most dangerous during your first 10 years of retirement.

    Early in retirement, your money still needs to last 20 to 30 years – an early blow to your portfolio can significantly impact its ability to do so.

    To defend yourself in the most dangerous decade of retirement, you need an account that allows you to avoid touching your stock portfolio until the market has recovered.

    The reason for that is that, historically, most market downturns take 3-5 years to recover back to their previous peak.

    David discusses the 4% Rule and the "catch" that comes along with it.

    Some experts, like Suze Orman, recommend having 3-5 years' worth of expenses accumulated in an emergency fund. David goes over why it may not be a good idea.

    David brings Indexed Universal Life insurance (IUL) and the concept of volatility buffer into the conversation.

    Remember: if you're within 10 years of retirement, now is the time to start thinking seriously about how you'll create a volatility buffer.

    Mentioned in this episode:

    David's new book, available now for pre-order: The Secret Order of Millionaires

    David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track

    Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight

    DavidMcKnight.com

    DavidMcKnightBooks.com

    PowerOfZero.com (free video series)

    @mcknightandco on Twitter

    @davidcmcknight on Instagram

    David McKnight on YouTube

    Get David's Tax-free Tool Kit at taxfreetoolkit.com

    Suze Orman
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    8 mins
  • How I'd Invest $2 Million Right Now

    How I'd Invest $2 Million Right Now
    Apr 29 2026
    David McKnight breaks down the approach he would follow if he were to invest a $2 million 401(k) in retirement. David points out that when you retire, you're no longer just investing for growth; you're investing for income. Remember: If you get this wrong, you don't get a do-over. In the case David discusses, many financial advisors would recommend investing the $2 million in the market and withdrawing whatever your lifestyle requires. The problem with that way of doing things, however, is the exposure to the sequence of returns risk. If the market crashes early in retirement and you're pulling money out at the same time, your portfolio could go into a death spiral from which it never recovers. The main trap those planning their retirement and retirees should avoid is running out of money before running out of life. David touches upon the role that a guaranteed lifetime income annuity plays in retirement planning. As far as annuities are concerned, he's in favor of annuities that have what he refers to as "piecemeal internal Roth conversion feature." That means being able to gradually convert that annuity from tax-deferred to tax-free during the annuity's deferral period. David recommends investing discretionary funds with the following ratio: 70% in a total U.S. stock index, 30% in a total international stock index. He would automatically rebalance if his allocations ever got more than about 5% out of alignment. The reason why David's approach lacks bonds is simple: if your portfolio goes down in your retirement years, your guaranteed lifetime income gives you the luxury of watching it recover before you take further distributions. Long-term care is a piece of the strategy that most advisors completely ignore – David explains why it shouldn't be overlooked. Moreover, the cash value inside that policy can also act as a volatility buffer. David brings up a move that can increase the sustainable withdrawal rate on your stock portfolio from 4% to as high as 8% with a 95% confidence rate. "I believe we're currently experiencing the lowest tax rates we're likely to see in our lifetime," says David. Many experts believe that by 2035, when the debt-to-GDP ratio will hit about 150%, the Federal Government would have to begin phasing in tax increases over time to avoid an all-out economic crisis. That's why David would like to convert his IRA to Roth, little by little, over the next 10 years in the most tax-efficient way possible. David provides a bird's eye view of the entire strategy, which by his own admission, "checks every single box." An Ernst & Young study looked at this type of strategy combining investments with insurance-based solutions like annuities and life insurance – David discusses its findings. "I'm proposing a strategy that gives you certainty where you need it most, your income and tax-free flexibility everywhere else," he adds. Such an approach allows you to neutralize longevity risk and tax rate risks all in one cohesive strategy. Mentioned in this episode: David's new book, available now for pre-order: The Secret Order of Millionaires David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com Ernst & Young
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    10 mins
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Wonderful episodes with right examples and importance of changing economy. Time for people to know more about right products.

Real time examples and explanations about current economics

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David speaks clearly and is very helpful and entertaining. Small facts and helpful hints on retirement planning.

Clear communication amd knowledge

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Thank you so much for making this podcast available to listen to on Audible.

Excellent!

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