Podcasts about lirp

In this episode of the Power of Zero Show, host David McKnight discusses the scenario in which you have maxed out your 401(k) and are wondering where you should invest the rest of your money. The episode kicks off with David addressing the type of 401(k)s you should be investing in first. There are two types of 401(k)s: the traditional pre-tax 401(k) and the Roth 401(k). Should you go for a traditional 401(k) or a Roth 401(k)? It all depends on whether you think your tax bracket is likely to be lower or higher in retirement… With the national debt set to hit $62 trillion by the year 2035, David believes that, “There isn't any way the Federal Government can service that type of debt without increasing taxes.”  Planning on retiring past 2035 and you're currently in the 24% tax bracket? Then, David recommends opting for a Roth 401(k). This year, you can put $23,500 into your Roth 401(k) if you're younger than 50, and $31,000 if you're over the age of 50. David talks about what to do if you're married and have maxed out your Roth 401(k), as well as what you can do if your modified adjusted gross income is less than $246,000 as a married couple, or $161,000 as a single filer. David illustrates the scenario in which relying on a LIRP (Life Insurance Retirement Plan) would make sense. According to a recent Ernst & Young study, if you can save between 3 and 5 years worth of living expenses in your LIRP by day 1 of retirement, you can increase the sustainable withdrawal rate of your stock portfolio from 4% to as high as 8%. David points out that there's no limit on how much you can put into your LIRP and, unlike with what happens with Roth contributions, you are not constrained by your modified adjusted gross income level. Another point in favor of opting for a LIRP is the fact that it grows safely and productively – the growth of the money in your LIRP is linked to the upward movement of a stock market index. Whatever that index does in any given year, you get to keep up to a cap that's typically between 10% and 12%. Index going down? Then, you're simply credited a zero.     Mentioned in this episode: David's national bestselling book: The Guru Gap: How America's Financial Gurus Are Leading You Astray, and How to Get Back on Track 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

Apr 7, 2025 – Curious about a tax-free retirement? In our latest Lifetime Planning podcast of the Financial Sense Newshour, Jim Puplava and financial expert Crystal Colbert unveil the power of a Life Insurance Retirement Plan (LIRP)...

This commercial-free episode of Money Management was originally broadcast on Saturday, March 8th, 2025, and dives into the topic of tariffs. How bad are they? What are the long-term effects? And learn what a LIRP is.Each week, enjoy a fresh episode of Money Management, with Jim Harvey, Mike Maehl, Andrew Harvey and the rest of the Opus 111 Group team offering their ground-level view of the week's financial news and events.The Investment Advisor Representatives (IARs) use the trade name/DBA, Opus 111 Group. All securities & advisory services are offered through Commonwealth Financial Network©, Member FINRA/SIPC, a Registered Investment Adviser. For a current list of our IARs please visit our website.Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network. The Financial Advisors associated with this website may discuss and/or transact business only with residents in states which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state. Please check Broker Check for a list of current registrationsInformation presented on this site is for informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any product or security.Review our Terms of Use:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠http://www.commonwealth.com/termsofuse.html⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠.Opus 111 Group is located at 111 Queen Anne Avenue North Suite 501 Seattle, WA98109-4925. Reach us at (206) 283-2345 or⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠info@opus111group.com⁠

In this episode of The Concierge CPA Podcast, Dr. Jackie Meyer interviews Dave Spence, founder of Tax-Free Tutors. They dive into advanced tax strategies, including the Life Insurance Retirement Plan (LIRP), and discuss how to create scalable accounting practices. Learn about overcoming industry challenges, identifying red flags in partnerships, and building tax-free income sources for the future. This episode is packed with actionable insights for accountants and financial advisors looking to elevate their services and plan for long-term success.

Examining life insurance retirement plans and breaking down Nelson Nash's book “Becoming Your Own Banker” to see how they compare to traditional retirement plans.

Today's episode is part 1 of David's interview with Power of Zero co-founder Larry DeLegge.  The two talk about value life insurance policies, children, and whether life insurance can serve as a viable volatility shield in retirement. David shares his thoughts regarding the “IUL vs. whole life insurance policy” debate. For David, starting a life insurance policy is like getting married – he explains why. When it comes to life insurance policies, there are two key things David looks at. The first one is safe and productive growth, the second thing is a guaranteed 0% loan. David touches upon the 4% rule and the so-called volatility buffer. “The problem with the 4% rule is that it's a pretty expensive way to go about saving for retirement,” says David. A recent Ernst & Young study looked at whether there is any reliable way to get an 8% distribution rate. David cites a study that said that bonds are much more correlated to the stock market than we previously thought and are much more volatile than previously thought..  David discusses precautions to take with the LIRP for your children to avoid unpleasant surprises.   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 MetLife Hancock Midland Dave Ramsey Ernst & Young Curtis Ray

Dive deep into the world of Life Insurance Retirement Plans (LIRPs) with host Dennis Mattern and financial maestro Adam Gulin, founder of Pinpoint Financial Services. This insightful episode uncovers the pros and cons of utilizing life insurance in financial strategies, shedding light on lesser-known aspects that could revolutionize your approach to retirement. Whether you're a seasoned advisor or simply curious about enriching your retirement, Adam's 42 years of expertise in tax planning and his innovative take on the LIRP will guide you through the complexity of modern financial planning. Tune in to unravel the mystery of LIRPs, learn how to defuse the 'tax ticking time bomb,' and discover why this is more than just a supplement to your retirement plan—it could be the key to unlocking a more prosperous future. Click play to empower your financial journey with strategies that go beyond the spreadsheet!----- ----- ----- ----- This podcast is for financial professional use only and not for use with the general public. The information provided herein is the exclusive property of CreativeOne and is protected by copyright and other intellectual property laws of the United States. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, or investment advice. CreativeOne is not responsible for the results of programs discussed on this podcast or any liability stemming from the use of it. Although we may promote and or recommend the services offered by this company, agents are ultimately responsible for the use of any materials or services and agree to comply with the compliance requirements of their broker-dealer and registered investment adviser, if applicable, and the insurance carriers they represent.Copyright 2024 Creative One Marketing Corporation.

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 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 David Walker Penn Wharton study: “When Does Federal Debt Reach Unsustainable Levels?”

If you have different retirement accounts at various brokerage firms, you may wonder whether you should consolidate them. One listener asked me that very question today. I'll answer it along with several others–don't miss the one about my finance book recommendations.  Are you curious about how you can improve your relationship in retirement? Then, make sure to listen to Mark Ross's suggestions in the Bring It On segment. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN LISTENER QUESTIONS [5:51] Should Greg and his wife consolidate their accounts? [11:39] Using the Obsidian note-taking app [13:42] Larry's question on RMDs and down markets [16:34] My recommendation on reading material for Sandy on money management [19:41] What is a LIRP? BRING IT ON WITH MARK ROSS [22:12] The relationship pillar requires communication [25:16] Have a retirement plan of record TODAY'S SMART SPRINT SEGMENT [30:07] Review these end-of-year housekeeping tips Resources Mentioned In This Episode BOOK - The Behavioral Investor by Daniel Crosby BOOK - 48 Days to the Work You Love by Dan Miller BOOK - Don't Retire, Rewire by Jeri Sedlar BOOK - Younger Next Year by Chris Crowley BOOK - Stacked by Joe Saul-Sehy BOOK - A Simple Plan to Wealth by J.L. Collins BOOK - Winning the Loser's Game by Charles Ellis BOOk - The Retirement Income Guidebook by Wade Pfau The Retirement Answer Man GoodReads group Notion Obsidian note-taking app Rock Retirement Club Roger's YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Roger's Retirement Learning Center

David gives a 1-minute summary of all his books on retirement.  The Power of Zero: How to Get to the 0% Tax Bracket and Transform Your Retirement. The book outlines a step-by-step plan for getting to the 0% tax bracket in retirement, because if tax rates double, as some experts predict, two times zero is still zero. Look Before You LIRP: Why All Life Insurance Retirement Plans Are Not Created Equal, and How to Find the Right One for You.  David explains that while various LIRPs may help get you to the 0% tax bracket, not all will do so with the same efficiency or effectiveness. In fact, finding the right LIRP for your tax-free retirement plan can be just like finding the ideal spouse. Just as you likely had a list of qualities you were looking for in a life-long partner, you should have certain attributes and provisions in mind when looking for the ideal LIRP. The Volatility Shield: How to Vanquish the 4% Rule & Maximize Your Retirement Income.  In this book, David breaks down financial truths that challenge conventional wisdom and reveal the gaping hole in people's retirement picture. He also reveals how you can open a volatility shield account that allows you to pay for your retirement living expenses in the year following a down market.  Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement. David lays out a comprehensive, step-by-step roadmap for a secure retirement and how to shield yourself from longevity risk as well as the unintended consequences of higher taxes.  The Infinity Code.  This book speaks of the evils of the modern monetary theory, which says that we can print an unlimited amount of money to pay for our nation's burgeoning debt load.  David shares insights from his upcoming book, Guru.  Americans love charismatic gurus who dish out one-size-fits-all financial advice that is easy to digest and implement.  However, the dumbed-down financial advice offered by Dave Ramsey and other gurus is good for bad investors but bad for good investors. David believes that while these financial gurus sometimes dispense good advice, it's nearly always at the expense of the best advice.     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 M. Walker

Step one of the Power of Zero strategy is to realize that due to unfunded obligations for Social Security, Medicare, and Medicaid and interest on the exploding national debt, tax rates in the future are going to be dramatically higher than they are today. Step two is to understand that in a rising tax rate environment there is an ideal amount of money to have in your taxable and tax-deferred buckets.  For your taxable bucket, that's around six months of living expenses.  For your tax-deferred bucket, the amount should be low enough that your RMDs in retirement are equal to or less than your standard deduction and low enough that it doesn't cause Social Security taxation. For married couples, that amount is around $350,000, and for single filers, it's half that amount. If you have a sizable pension, the amount could be zero. Step three is to calculate how much time it will take to shift your balances to tax-free in order to achieve those balances. Preferably slow enough that you don't rise into a tax rate that will give you heartburn, but quickly enough that you get all the heavy lifting done before tax rates rise for good. 2030 is currently the target date. Step four is to see if you qualify for the Life Insurance Retirement Plan. With the LIRP, it gives you a death benefit that counts as long-term care and it can greatly extend the life of your stock market portfolio. One of the primary reasons you are paying for your LIRP is being able to access your death benefit if you need long-term care, but if you die peacefully in your sleep your heirs still get the death benefit. Step five is calculating your income shortfall in retirement. Figure out your after-tax needs in retirement that subtract any sources of guaranteed income like Social Security or a pension. Step six is to contribute a portion of your IRA to an annuity in the form of a fixed indexed annuity with the piecemeal internal Roth conversion feature. You want to contribute enough today so that by the time you have finished your Roth conversion it will produce enough tax-free guaranteed lifetime income that it will bridge the shortfall in your after-tax shortfall.     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 Come Back America by David Walker 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

Your LIRP functions as the ideal volatility buffer because it grows safely and productively in a tax-free way. According to a recent study by Ernst & Young, investors that contribute 30% of their retirement savings to a LIRP will have their savings last longer than people who put 100% of their savings into investments alone. This seems to fly in the face of every financial guru who has ever opined about cash value life insurance like Dave Ramsey and Suzy Orman. It's commonly understood that with an investment-only approach to retirement, you build up a large pile of money and take a modest distribution rate each year adjusted for inflation. If you take out higher than 4% per year, you drastically increase the odds of sending your portfolio into a death spiral during down years in the market. The most critical time is the first 10 years in retirement where you can expect two or three down years, any of which can cause your retirement portfolio survival odds to plummet. The LIRP serves as a volatility shield during those first ten years by allowing you to take tax-free loans from the policy during those first ten years of retirement.  The LIRP has a few features that make it the ideal volatility shield.  You can't combat market risk with an account that is exposed to market risk. LIRPs grow safely and productively. LIRPs in the form of universal indexed life insurance have a historical track record of 5% and 7% net over fees over time, making it easy to accumulate the amount of capital you need to shield yourself from volatility. LIRPs are tax-free. If you don't have to pay taxes during the accumulation and distribution phase, your money will grow more efficiently and you won't have to save as much money along the way. If you can take distributions tax-free, you aren't exposing yourself to tax rate risk and those distributions don't count as provisional income. If your LIRP is fully funded from day 1 of retirement, you will be in a position to pay for lifestyle expenses during the years following a down year in your stock market portfolio. According to the study, if you contribute 30% of your retirement savings to an LIRP you will find that your sustainable distribution rate skyrockets to as high as 8%. The study made a statistical case that shows the LIRP can extend the life of all your other investments significantly. The most viable retirement strategy is the one that gives you the highest likelihood that your retirement savings will last through life expectancy.   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

Ep#151: Achieving a Tax-Efficient Financial Future: Unraveling the Power of Zero.What if you could secure your financial future in a tax-efficient manner? Join us as we unravel the powerful concepts in David McKnight's book, 'The Power of Zero.' We kick off the episode with a discussion on the dire warning issued by CPA David Walker, and why relying solely on Social Security and Medicare for retirement is a risky move. Discover the importance of understanding these systems and how they can impact your financial future.We also dive into the different tax buckets - taxable, tax-deferred, and tax-free. Learn the benefits and drawbacks of tax-deferred accounts like 401k's, IRA's, and others, as well as the hidden taxes, penalties, and fees that can negatively impact your long-term financial goals. Moreover, we explore the advantages of maximizing tax-free retirement savings through vehicles such as Roth IRAs and the Life Insurance Retirement Plan (LIRP). Don't miss this opportunity to gain valuable insights and take control of your financial destiny!Disclaimer:  We are not doctors, therapists, psychologists, lawyers, or medical professionals of any kind. Please be advised if you have any life threatening medical conditions or mental health, please see your doctor. National Suicide Hotline: 988   Thank you for all the continued support. Please leave us a review  here or on our Facebook Page: Sexy Freedom Media You can also send us a note or review to SexyFreedomNow@gmail.com Join our Facebook Group: Sexy, Successful, and Soul Fed  https://www.facebook.com/groups/sexys... Thank you for your gifts and financial support of this podcast through Venmo @SexyFreedomMedia Helen Edwards is a Financial Strategist, Creator of Speaking Events, Workshops, Yoga Retreats, & Host to the Sexy Freedom Media Podcast. International Author: Nothing Sexier Than Freedom & Your Inner Evolution. January Liddell is a Financial Expert, author, and military wife. Click our Link below to find more information on us and our offers today! More info here: https://januaryliddell.com/ CLICK HERE for to book your 10-minute Financial Consultation Get your copy of the book, Nothing Sexier Than Freedom CLICK HERE FOR MORE INFORMATION: https://linktr.ee/sexyfreedommedia   Support the show "Buy us a coffee" https://www.buymeacoffee.com/Helofajo... https://www.buymeacoffee.com/januarylidl   **Want to start your own podcast? We love using Buzzsprout! Following the link in the show notes let's Buzzsprout know we sent you, gets you a $20 credit if you sign up for a paid plan, and helps support our show. https://www.buzzsprout.com/?referrer_...Support the show

In honor of the NFL Draft just wrapping up, we thought we'd do a little drafting of our own on the podcast. So we've asked Eric Hogarth, CFP® to put on his General Manager shoes and lead our retirement planning team into a financial draft. Find out which products make the grade and which get left behind.   Here are some of the things we discuss in this episode: 1:11 – The Roth IRA is a first round pick 1:58 – Gold and precious metals are a pass. 3:18 – Life Insurance Retirement Plan or LIRP 4:41 – The variable annuity   6:37 – Indexed annuity gets a good grade 8:04 – Rental properties are a second round pick 12:23 – CEO's Corner: How does Joel consume news? 21:32 – Mailbag question on how much of your annual salary you need saved.   Check out our other free financial resources here: https://johnsonbrunetti.com/financial-resources/ Contact our team: https://johnsonbrunetti.com/contact-us/     

IUL and whole-life policies both have their place. Whole-life advocates prefer it because your cash value is guaranteed to increase each and every year as the IUL has growth that is tied to the upward movement of a stock market index. The downside to the IUL is that down years do happen, and in those years you get credited a zero but still have the expenses associated with the IUL. David goes through a scenario where all premiums within a LIRP go to the IUL's fixed account. By allocating money in this way, you will net a consistent rate of return that is not linked to the upward movement of a stock market index, even during a down year. By allocating your premiums to your IUL's fixed account, you can recreate all the attributes of the whole-life policy inside the IUL, only on a supercharged basis. To discover the companies that David used to model this scenario, email him at info@powerofzero.com The scenario takes a 40-year-old male contributing $20,000 per year until the age of 65. In either model, the factors were averaged out to make the comparison as fair as possible. Starting with the whole-life policy, at age 66 it produced a loan of $42,675 every year until the age of 100. That is cumulative distributions of $1,493,625. The IUL is able to produce a loan of $48,084 every year until the age of 100, with cumulative distributions of $1,683,940. If you are just comparing maximum loans on the backend, the IUL comes out on top. Whole-life policies do not have guaranteed zero-percent loan provisions which is one of the reasons that policy lags behind. With that being said, you wouldn't want to use an IUL for its fixed account. Using a slightly different model, the benefit of the IUL races ahead considerably. At 7% growth, the loan value jumps to $100,100 and the cumulative distributions go to $3,503,500. By allocating your premiums to the fixed account inside of a maximum funded IUL, you can generate more income than you would inside a maximum funded whole-life policy. By taking a little more risk in your IUL and tying the growth of your cash-value to the growth of a stock market index up to a cap, you can more than double your annual tax-free distributions. 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 video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com

David sits down with financial advisor Daniel Rondberg to discuss how to dramatically lower the tax bill on your Roth conversion.  They start the conversation by describing why the Power of Zero message is crucial to tax-free retirement. According to David, stress-free retirement often comes down to only worrying about the things you can control.  David and Daniel talk about the Power of Zero movie and what gave it great legitimacy.  David explains how interest rates can affect your retirement. David reveals why he moved to Puerto Rico and the tax benefits he gets from living in a foreign country.  Daniel and David discuss whether it makes sense to pay taxes on Roth conversions using LIRP loans. Thoughts on reverse mortgages and why only 1% of children want to inherit their parents' home. David shares why he is a big fan of IULs and what you can do to get the most out of them. David reveals that 70% of the time, people are motivated to take on LIRPs because they promise to pay for long-term care in advance of a person's death.  Daniel and David discuss what happens to unused long-term care insurance benefits if a person never needs the care. Will the family get the money back? Did you know that you could get your social security tax-free for the rest of your retirement if you got yourself to the zero percent tax bracket? Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.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 Comeback America: Turning the Country Around and Restoring Fiscal Responsibility by David M. Walker

Part 5 of a multi-part series on an introduction to investing. In this episode Andy talks about the various places in which cash can be invested, as well gives a summary of multiple types of "alternative" investments such as real estate, commodities, hedge funds, interval funds and insurance productsLinks in this episode:My Podcast episode - What is a LIRP, or Life Insurance Retirement PlanThe first of my three Podcast episodes about Annuities - hereMy YouTube video What is Cryptocurrency, with Zechariah SchaeferFacebook group - Retirement Planning Education (formerly Taxes in Retirement)YouTube channel - Retirement Planning Education (formerly Retirement Planning Demystified)Retirement Planning Education website - www.RetirementPlanningEducation.com

David goes through five unique strategies to transform a $1 million inheritance into a tax-free asset. Although a non-qualified inheritance is tax-free, the step-up in the basis rule will lead to a huge tax problem as your asset grows over time. Strategy #1 - Pay the taxes on your Roth conversions. Remember, the worst way to pay taxes on a Roth conversion is on the IRA itself.  Strategy #2 - Max out your Roth 401K for you and your spouse. Use your earnings to max out the $60,000 limit for both you and your spouse, and use the inheritance to fund your lifestyle.  Strategy #3 - Fully fund your Roth IRA. Not a year should go by when you and your spouse are not fully funding your Roth IRAs.  Strategy #4 - Use the inheritance to fund your retirement. If you're already retired, it may make sense to use the inheritance to support your lifestyle instead of going after your IRA. Strategy #5 - Contribute money to a life insurance retirement plan. If you still have some money left after implementing the above four strategies, consider taking advantage of the flexible contribution limits of a LIRP. David explains how you can productively grow your money in a LIRP tax-free.  According to David, if you inherit $1 million and leave the money in a taxable bucket, you will be paying taxes over the balance of your lifetime. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

Rule #1: Tax rates will go up by 2030. The Fed needs huge sums of money to pay for unfunded obligations, so taxes will have to go up; otherwise, the country will go bankrupt. Rule #2: In a rising tax environment, there is a mathematically perfect amount of money to have in your taxable and tax-deferred brackets. David explains how you can calculate it.  Rule #3: Anything above and beyond the ideal balance mentioned above should be systematically positioned to tax-free. Preferably you don't do it all at once, but quick enough to get all the heavy lifting done by 2026.  Rule #4: The type of retirement account you contribute to should be determined by comparing your current tax bracket to your future tax bracket.  Rule #5: Roth retirement accounts are your best friend. These vehicles allow you to shift nearly unlimited money from tax-deferred to tax-free. Rule #6: It would be best if you did most, if not all, of your heavy lifting before 2026. You have four years before the tax cuts end, and every year you wait to take advantage of these low tax rates is another year you will have to pay more than you need to. Rule #7: The 32% tax bracket is your enemy. Remember, the 32% tax bracket is 33% more than the 22% tax bracket. So try as hard as possible to avoid it when shifting your money to tax-free. Rule #8: Leave some money in your tax-deferred accounts. David explains that if you shift everything to tax-free, you won't have any taxable income left - which means you will needlessly pay taxes on money that you have received tax-free. Rule #9: Make sure your tax-free retirement plan keeps you below the provisional income threshold that can cause social security taxation. In many cases, your money will run out five to seven years faster if your social security is taxed. Rule #10: Never annuitize your retirement in the tax-deferred bucket. Annuities in your tax-deferred bucket will count as provisional income and cause you all sorts of problems.  Rule #11: Not all Life Insurance Plans (LIRP) are created equal. And it only makes sense to get an LIRP if you plan to keep it till death.  Rule #12: You will need more than one stream of tax-free income in retirement. There is always the risk that the IRS will legislate one of your tax-free streams of income out of existence.      Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

David kicks off the conversation by laying out the 3 basic Life Insurance Retirement Plans (LIRP) and how you can find the best one for your particular situation. For David, an LIRP is like marriage - it's a long-term commitment that you only ever consider if you're willing to keep it until death.  If you are looking for absolute guarantees, David explains that no product compares to whole life insurance. The promise to pay a death benefit if the premium has been paid, plus the option of a very stable and safe savings plan, make it attractive for most investors.  David points out that the potential to borrow money from a policy is one of the reasons some people buy whole life insurance. However, whole life insurance has its drawbacks. For example, David reveals that unmonitored policy loans can derail your retirement plans or leave you with a significant income tax gain. In the case of Variable Universal Life Insurance (VUL), David explains how the policy has investment subaccounts that allow the insurer to invest the cash value of a policy. Although you may enjoy better-than-average returns with a VUL, your cash value can be significantly reduced due to poor performance of your investment options. The thing that makes Indexed Universal Life Insurance (IUL) attractive is its ability to generate greater upside potential, flexibility, and tax-free gains. However, David explains that the IUL is not designed to be a stock market replacement, nor can you experience the type of return you could get from a VUL.  When it comes to ILRPs, David is convinced there is no one perfect solution because all three have distinct attributes. Your job is to find the best one for your situation while protecting yourself against potential downsides.      Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

Joe and Big Al discuss LIRPs, or life insurance retirement plans, they spitball whether to take full pension survivor benefits or buy a life insurance policy, and whether to sell losing stocks for even bigger losers to take advantage of the 0% capital gains tax bracket. Plus, zero coupon municipal bonds and the de minimis rule, and target date funds as part of Paul Merriman's Two Funds for Life strategy. Finally, how do dividends figure into the 4% rule for retirement withdrawals, and should that 4% come from stocks or bonds? Show notes, free financial resources, transcript, Ask Joe & Big Al On Air: https://bizlink.to/ymyw-405

Lane Martinsen from Financial Fast Lane interviews David McKnight on why you should use LIRP and the benefits of getting to the zero percent tax bracket.  David explains the motivation behind his book The Power of Zero. David reveals why he is convinced that future tax rates will be significantly higher and why it makes sense to be in the zero percent tax bracket in retirement. If you are in or approaching retirement, David recommends taking advantage of the historically low tax rates before the current tax code expires in 2026. According to David, the most effective retirement planning technique combines all available tax-free strategies. Does the 0% tax bracket really exist? David explains how Americans can get into the zero percent tax bracket without trying to game the IRS. David goes through the strategies that can shield you against the risk of a higher tax bracket - and the main components of a comprehensive approach to tax-free retirement.  David breaks down what Life Insurance Retirement Plan (LIRP) is and why it's so effective when it comes to tax-free retirement.  David reveals the holy grail of retirement planning and what it entails. Numerous studies have shown that the number one concern for retirees is not the risk of paying higher taxes, but the fear of outliving their money. David talks about his second book, Tax-Free Income For Life, and how it can potentially help retirees mitigate longevity and tax rate risk through sane financial planning. David's advice to retirees and people nearing retirement: Rising taxes are inevitable. Don't let a year go by without taking advantage of the historically low tax rates.    Mentioned in this episode: Financial Fast Lane YouTube Channel David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

What do you get when you cross liquidity, reduced tax liability in your retirement years, and a name that sounds like a toad enjoying a milkshake? A LIRP (life insurance retirement plan). Although the name lacks a certain flair, a LIRP is an investment and tax strategy that allows you to use the cash value in your life insurance policy to not only be your own bank but also provide a place to direct cash for future tax free withdrawals of cost basis or liquid access through policy loans. This week, we talk more about what a LIRP is, who should consider one, and how this option compares to and can work alongside other retirement/investment options such as 401ks, ROTH IRAs, and brokerage accounts. As always, our discussion is for education only and should not be construed as advice. Definitely get a hold of your personal tax and/or investment advisors for additional information to see if a life insurance retirement plan is right for you.

David is asked about the pros and cons of the Indexed Universal Life – or LIRP – and what to look for when researching it. As far as LIRPs are concerned, David suggests looking for contracts that are both tax- and cost-free. David discusses some mistakes that some experts such as Dave Ramsey make when talking about ‘buy term, invest the difference'. David explains that running out of money before running out of life is one the biggest risks retirees are facing today – and goes over two ways to prevent that from happening. David is asked for his predictions on how the current fiscal trajectory is going to affect housing prices, your bottom line and wallet. David recommends that young people try to be more inclined to contribute to tax-free today due to the fact that taxes are likely going to be higher when they're in retirement compared to what they are at the moment.     Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

There's this belief among financial experts that life insurance is the financial silver bullet. However, as David explains, that's not 100% accurate.  Yes, life insurance can mitigate every retirement risk and solve all forms of retirement problems, but it's never a safe bet when implemented all on its own. A Life Insurance Retirement Plan (LIRP) should not be the only cog in your retirement machine because retirement is all about squeezing as much juice as possible from all available tax-free accounts. David demonstrates how no two tax-free retirement plans are created equal. The people that enjoy stress-free retirement are the ones that strategically take advantage of more than one tax-free retirement account. The first reason you shouldn't go all-in with life insurance is the wisdom of not putting all your eggs in one basket. The sequence of returns risk is the other major reason why it doesn't make sense to retire on LIRP alone. This essentially means a phase when you're forced to take money out of your retirement plan in a down market. David describes how the timing of withdrawals from a retirement account can influence how long an investor's money lasts during retirement. Low returns early in retirement can deplete a retiree's portfolio faster than initially anticipated. Going bankrupt during retirement is detrimental because, if you don't have at least a dollar in cash value to your name, the IRS makes you pay all the foregone taxes up to that point in your life, all in one year.  LIRP is not a substitute for the stock part of your portfolio. Its growth is not sufficient enough to stretch your retirement dollars through life expectancy. David explains that if you retire at 65, your money must last for at least another 30 years. The stock market is well suited to such a scenario if structured efficiently.  David recommends doing one thing to safeguard your retirement: diversify as much as possible.      Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

Since 1997, David took a 5 minute presentation on taxable and tax free income and turned it into a 25 year career. He talks about the 6 different streams of tax free income you can get in retirement. These include Roth IRA & Roth 401k, LIRP, tax conversions. You will learn the 6 different types of tax free income, what David recommends, and how inflation and recession impact your investments.  David famously teaches How to Get To The Zero Percent Tax Bracket by Retirement. David also referenced Club Capital Podcast guest Ed Slott's book, The Forward during this interview.  (You can find Ed Slott's episode, Episode 59: The Retirement Savings Time Bomb right here on the podcast.) He noted that the tax cuts in 2008 will be a benefit until about 2030.  However, if they raise the rates on the national debt, we may not even be able to service it.  Learn in this podcast what the actual year is that you need to pay attention to for investing, and how long you have to move your money to a zero percent tax bracket at retirement. Find David's resources like The Power of Zero & Tax Free Income For Life at https://davidmcknight.com/

Life insurance retirement plans or LIRPs are long-term propositions. They only really work if you think of them like a marriage, meaning they work best if it's until death do you part.  Don't start an LIRP unless you're planning on dying while it's enforced, even if that means you have to keep it for 40 or 50 years. Your LIRP needs to be a 0% loan. One of the things that makes the LIRP so appealing is that you can take the money out tax free, and you do that by way of a loan.. An LIRP may be tax free, but it's not cost free. For starters, you aren't actually taking a loan from your own policy. You're taking the loan from the life insurance company and you're using your policy's cash value as collateral for that loan. I will explain how it works in this episode. Some companies say that their current practice is to charge you 3%, but they reserve the right to charge you four, five or eight percent at their leisure, sometime down the road. And the longer you give them to decide, the more detrimental. Your loan provision is the single most important provision in the entire contract. You absolutely have to make sure that you understand your loan provision and its implications before you ever sign on the dotted line. The second thing your LIRP absolutely must have is interest charge in arrears (vs charge you interest in advance). If you give it to them at the beginning of the year, as opposed to the end of the year, you'll lose out on what that money could have earned for you. The third thing you must insist that your LIRP have is daily sweeps. Some companies are so small that they have to wait anywhere from three to six months to pull up enough assets to where it's cost effective enough to purchase the options required to make those assets grow. In other words, it's not going into your growth account and making you money right away.  Make sure your LIRP has an overloan protection rider. This means that when your cash value drops to a certain point, the insurance company will give you the option of having them essentially take over the policy. They will reduce your policy's death benefit to the point where the remaining cash value essentially pays the policy up. What if you die before the policy is up? Don't worry - you won't have paid something and never get it back. Someone's still getting a death benefit, probably your kids or your grandkids. So there isn't really that sensation of having paid for something you hope you never have to use. Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

Explanation of a LIRP, or Life Insurance Retirement Plan, which is ultimately an Indexed Universal Life insurance policyFacebook group - Taxes in RetirementYouTube channel - Retirement Planning DemystifiedNewsletter - Retirement Planning Insights

This episode focuses on the unsettling math behind Dave Ramsey's recommendation to buy term and invest the difference. David shares the definition of the ‘Buy Term and Invest the Difference' approach, and talks about Ramsey's claim that permanent life insurance is a rip-off. For David, Dave Ramsey makes a big mistake for the fact that his analysis doesn't include two major expenses: the cost of term life insurance and the expense ratio inside Roth accounts. David feels that Dave Ramsey omits key details about permanent life insurance over time, in an attempt to justify his claim that permanent life insurance is a rip-off. David suggests making your permanent life insurance the bond portion of your overall investment portfolio. His advice is to reach into your current investment portfolio, take out your bond allocation, and replace it with permanent life insurance. David discloses that he isn't trying to make the case that you should put all of your money into the LIRP – what Dave Ramsey calls permanent life insurance. He suggests that Ramsey has taken a disingenuous approach in his claim that ‘Buy Term and Invest the Difference' is the only way to go.     Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

In this episode, David wants to share the truth about Dave Ramsey, look at the two pillars of his financial worldview, and deconstruct those beliefs. David believes that if Dave Ramsey's audience followed his advice on paying off high-interest credit card debt, the U.S. would be a much healthier place from a financial perspective.  In David's assessment, Ramsey's audience is made of lower to middle-income America, people who are making $50,000 per year but who are spending $60,000. With his approach, Ramsey seems to be dispensing one-size-fits-all financial planning advice in an attempt to appeal to the masses.  David notes that Ramsey's audience isn't the Power of Zero audience. Power of Zero audience members have generally done a good job of saving money, and they are in tax-deferred buckets. They're trying to figure out how to distribute their retirement savings in the most tax-efficient way possible. It's the person who's making $50,000 per year, but spending 60,000 it's lower to middle income America, who are struggling to pay their bills, so he's dispensing one size fits all financial planning advice in an attempt to appeal to the masses. The first Dave Ramsey principle that runs afoul of Power of Zero thinking has to do with his recommendations of going back into the tax-deferred bucket with all of the unintended consequences that go along with it. What Power of Zero thinking suggests in these cases is for you to make contributions to the LIRP in an effort to enjoy the benefits of getting to the 0% tax bracket in retirement. For David, Dave Ramsey doesn't seem to understand or appreciate the role that a properly structured LIRP can play in helping you get into the zero percent tax bracket and retirement, particularly in a rising tax rate environment. David believes that financial gurus like Dave Ramsey often find themselves on the outside of the tax-free paradigm looking in trying to interpret what they're seeing through the lens of their tax deferral worldview. While their intentions are often knowable, he says, their recommendations – if accepted at face value – can lead to a cascade of financial consequences, many of which could actually prevent you from ever getting to the 0% tax bracket in retirement. The second pillar of Ramsey's David has an issue with his lack of understanding of how the fees and the LIRP are structured. David sees Ramsey as someone who fixates on what the LIRP fees are in the first few years and extrapolates those fees out over the life of the program. The problem is that by fixating on the fees of the LIRP in the first few years without considering the broader picture, Ramsey perpetuates the myth that all LIRPs are too expensive. David explains how LIRPs work. Their fees are higher in the early years and much lower in the later years. However, when you average it out over the life of the program, it's going to cost you between 1-1.5% of your bucket per year. The longer you keep your LIRP, the lower the average annual expenses over time. For David, Dave Ramsey is so fixated on the fees of the LIRP in the first few years that he fails to see the forest for the trees. He fails to recognize that the longer you hold your LIRP, the greater the internal rate of return. A situation David has seen happening is when some people get to the point in their policy when the fees start falling through the floor and, after reading a book or listening to a podcast episode by Dave Ramsey, they drop their policy because of what they have heard him say.  Just when the LIRP was starting to build a head of steam, they succumb to Ramsey's mischaracterization of LIRP fees – which leads to them dropping their policy, losing their death benefits, and incurring unwanted surrender fees along the way. David recommends having the following retirement planning approach in a rising tax rate environment. You want to have between four and six different streams of tax-free income, none of which show up on the IRS's radar, but all of which contribute to you being in the 0% tax bracket.     Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

In this episode, Mark Botros and Tom Phelan talk through an Economic Update including Real Estate, Stock Market, Supply Chain, Industries that are thriving, and what Tom sees going forward. Time warps for the busy and powerful: [00:00:00] Welcome Back, Tom, a lot has happened in 10 months [00:02:29] The impact of remote work and unemployment [00:02:48] Supply Chain impacts [00:03:14] Panic Buying Coffee [00:03:55] They're begging me for my used car [00:04:39] Where are we in the cycle? [00:06:07] It's like a balloon [00:06:55] What going on in Real Estate? [00:12:59] What's going on in the Stock Market? [00:16:32] Should we really be considering Real Estate -- NOW?? [00:19:49] Is now a good time for people to pay down their first mortgage? (LIRP, Reverese Mortgages) [00:23:28] The Ideal Portfolio [00:24:57] Thanks for watching, Don't forget to subscribe, Check out these other clips and episodes fromthe podcast Tom Phelan ("Fay-len") Is the controversial author of numerous best-selling eBooks “The Reluctant Realtor Who Won't Buy Investment Property©2021” “A Teacher's 403(b) – Why Is Real Estate Missing©2021” And on Amazon Kindle eBooks: “The Big IRA Gamble” and “401(k) Roulette ©2020” Tom says estimates show 45 million people have invested $10 trillion dollars in IRAs and another 30 million 401(k)s Owners are gambling $8 trillion dollars in Wall Street. Wow, Wall Street “Fees” are almost incalculable on $18 trillion dollars with hundreds of billions being added annually. From years of experience Tom believed far too many IRA and 401(k) Owners are apathetic about their Wall Street investments, a fact Wall Street counts on … a lack-of-personal involvement. But there is hope Tom says, if people will listen and choose Wall Street alternatives to avoid the needless Risk of IRA and 401(k) funds. Armed with this new-found knowledge Tom will show people how to strategize how to retire years younger and with more retirement income dollars, possibly Tax Free Income dollars. Oh and if you've ever had a dream of owning a vineyard in Argentina, Tom has a few 5-acre Boutique Malbec vineyards your IRA or Individual 401(k) can buy...no...he really does. He says he has the solution for investing, living, and retirement, but only those who will step off their Hamster Wheel and listen. --- Send in a voice message: https://anchor.fm/markbotros/message

Josh is joined by Best Selling Author and tax strategist. David has helped put thousands of Americans on the road to the zero percent tax bracket. In this discussion they discuss the various methods from David's books that lay out a step-by-step plan on how to get to the 0% tax bracket in retirement. Strategies like LIRP, tax location and taking advantage of historically low tax rates today.

This episode focuses on a question David recently got from a couple – they made $650,000 per year and wanted to know whether they should consider doing a Roth conversion. Some details about the California-based couple who asked David their question: they're both age 50, with $1.5M in their old IRAs and 401k. They had a lifestyle need of approximately $100,000 after tax, and had about $1M in liquid savings in their taxable bucket. And, lastly, they were contributing $100,000 per year to that bucket and were growing it in plain taxable mutual funds. The couple, which represents the case-study for this episode, are in the highest marginal tax bracket (at 37%). In addition to that, they would have to pay another 11.3% in California State tax. This means that, were they to do a Roth conversion, they would be paying tax on top of all their other income, and they would be paying tax at 48.3%. In other words, they would be giving away nearly half of whatever portion of their IRAs or 401k they converted back to the IRS. Having all of the information above, the question becomes: does it make sense for a couple of 50 year olds to undertake a Roth conversion? For David, if they believed that the rates at which they'd be forced to pay in the future are going to be higher than today's rates, then the answer is yes. Then, they should pay the tax today before the IRS absolutely requires it somewhere down the road, at higher rates… However, if they don't believe that taxes down the road are going to be higher than they are today, then they shouldn't do a Roth conversion. David discusses the fact that, sometimes, we get so caught up in the idea of getting to the 0% tax bracket at all costs that we fail to do the math along the way to see whether the cost of doing so actually makes sense. For David, Roth conversions tend to make sense for people who will be in a similar income range in retirement – particularly if they're currently in the 22 or 24% tax brackets. David warns against allowing ourselves to become so consumed by the fear of higher tax rates that we make irrational decisions about the timing of our payments. We have to be patient, thoughtful and methodical. David shares the fact that the situation this podcast episode revolves around is a classic case where it may make sense to utilize the tax-free qualities of the LIRP (Life Insurance Retirement Plan). With the LIRP, we're getting as little death benefit as the IRS requires, and we're stuffing as much money into it as the IRS allows, in an attempt to mimic all of the tax-free benefits of the Roth IRA without any of the limitations of a Roth IRA.     Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

The idea behind today's episode comes from a conversation David had with someone at a recent event he spoke at. He praised the LIRP as the “perfect Swiss Army knife-type of investment,” and couldn't understand why more people didn't make it their only investment tool. David isn't a fan of conversations that position the LIRP as a “Holy Grail” of financial planning. David shares examples of questions and conversations of the arguments that may be made by someone who's a big believer in the LIRP in these terms. David discusses potential scenarios and conversations you may find yourself having. The Power of Zero strategy calls for multiple streams of tax-free income, none of which show up on the IRS' radar but all of which contribute to you being in the 0% tax bracket. There are four streams of tax income: the Roth IRA, the Roth 401k, the Roth conversion, and the RMD that's up to standard deduction limits out of your IRA.  David discusses how they're being invested in, and how some licensed life insurance agents persuade people against investing in the stock market. As David illustrates, there are some shortcomings in the approach similar to the event attendee he was chatting with, as the approach doesn't appreciate the broader role that the stock market plays, in a balanced approach to tax-free retirement planning. The LIRP, especially that in the form of a puppy and in the form of the IUL Index Universal, can generate up to 5-7% annual rate of return. “The LIRP is not designed to be the primary source of retirement”, says David. “Savings are designed to be a supplemental source of retirement savings”. David goes over the type of life insurance agents you want to stay away from, and why you may want to embrace a stock market-type approach to investing. When it comes to the LIRP coming into play, the focus should be on an approach that involves both stock market and LIRP – as they both play an indispensable role in a comprehensive, and well-balanced, path to retirement planning.   Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

David explains how, normally, we think of the sequence of return risk as the risk associated with the order in which you experience investment returns in your stock market portfolio in retirement. There are a couple of different ways you can safeguard yourself against sequence of return risk.  The first one is to allocate money to an annuity that provides for your income during those early years of retirement so that you aren't forced to take money out of the stock market. The second option is to build up cash value as long as you start with enough time before you retire. You can build up cash value inside your LIRP, and you can use that to pay for lifestyle expenses during the down years in the first 10 years of retirement. Lastly, you can shift money out of your stock market portfolio into what David refers to as time-segmented portfolios – short-term debt instruments designed to mature when you need the money. Segmented portfolios are a safe and productive way to mitigate sequence of return risk in the first 10 years of retirement. In Power of Zero, David describes 3 basic types of LIRP: the growth in your cash account being linked to investment bonds in the insurance companies of the general portfolio, the Interest Rate Sensitive Universal Life, and the so-called Variable Universal Life (VUL). For those of you who have VUL, it isn't necessarily time to panic, says Nelson.   Mentioned in this episode: David's books: Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life and The Infinity Code DavidMcKnight.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube

There are dozens of contexts in which life insurance gets used, but 95% of the time, and from a Power of Zero planning standpoint, it gets used in two different ways. David explains how having a certain amount in your taxable bucket may sound great because it's liquid and you can access it, but by taking the inefficiencies in the taxable bucket, you amortize them out over the balance of your lifetime – and this may end up costing you hundreds and thousands of dollars. There are different ways you can skinny down your taxable bucket. The first one is utilizing your least valuable asset – your taxable bucket – and use that to pay for your lifestyle. Maximizing your 401k or, even better, your Roth 401k at work is a second way to skinny down your taxable bucket. The third way is to simply contribute to the Roth IRA. David suggests never letting a year go by where you don't contribute to the Roth IRA. The fourth way to skinny down a bloated taxable bucket, on the other hand, is by using those dollars to pay for the taxes on your Roth conversion. As David notes, if you're younger than 59 and a half, the only way to do a Roth conversion is if you have money sitting in your taxable bucket that you can earmark for the tax on that Roth conversion. And in case you try to have the IRS withholding tax from your Roth conversion when you're younger than 59 and a half, you'll get a 10% penalty even though you may be taking that money out and giving it back to the IRS in the form of taxes.  If you're younger than 59 and a half, you can have taxes withheld directly from the Roth conversion itself, even though David doesn't recommend doing it. The last way you can spend down on a taxable bucket that has a balance that's far too high is by way of the LIRP.  David explains that the LIRP is not designed to compete with your stock market investments, rather to serve as a bond replacement. Reaching into your investment portfolio, ‘pulling out the bonds' and replacing them with the LIRP will get you a greater return, lower risk, and a lower standard deviation. It's just a more effective way to grow your money as a bond replacement. David sees growing your money between 5 and 7% without taking any more risk than what you're taking in your savings account as a safe and productive way to grow at least a portion of your retirement savings. David goes over how the LIRP can be much more efficient than simply growing dollars in the tax-free bucket.

Mark Byelich doesn't know when taxes are ever going to be lower than they are right now. David sees Medicare, not Social Security, as the main issue because Medicare is five times more expensive and it's what's really going to be driving debt over time.  David thinks that Social Security can easily be fixed by moving the age of retirement or by adding means testing like it happens in other countries. In his opinion, the challenge is how to renegotiate Medicare. It's what is increasing by 6% each year, on average. This, without taking into consideration that there are 10,000 baby boomers who are exiting the workforce. Mark confirms a question that was asked; the amount you can put in a Roth IRA annually, in 2022, is going to be limited. David believes that the direction capital gains are heading toward depends on who's in office. If you have Democrats at the Presidency, they're most certainly trying to raise them. Republicans tend to think that high capital gains affect the growth of the economy. If one leaves politics aside and looks at the math of it all, capital gains are going to have to rise precipitously – along with individual tax rates – or the U.S. is going to go broke as a country. David is a fan of extending the Roth IRA conversion period beyond 2026. In replying to a question that was asked, he discusses how he would prefer paying the 22-24% bracket up until 2026 rather than preventively paying the 32% bracket. He thinks that there is going to be a “perfect storm” in 2030; demographic, debt, and unfunded obligations – so you want to get things in order before then. There are a couple of things that have hit a nerve with David; bouncing into the 32% tax bracket and people wincing over IRMA.  There's a trade-off, though; one can pay an increased IRMA in the short term to spare IRAs and Social Security from higher taxation over the long-term. If a person can get to 0% tax bracket in retirement by shifting most of their assets to tax-free, they would put themselves in a position where they wouldn't have to pay IRMA anymore, they wouldn't have to pay Social Security taxes anymore, and they would shield themselves from the impact of high tax rates down the road.  David provides an overview of his books Power of Zero, Look Before Your LIRP, The Volatility Shield, Tax-Free Income for Life, and his upcoming one, the 75,000 word-long, The Infinity Code. David shares what is the greatest risk according to retirees; running out of money before you run out of life.

In a previous episode of the Power of Zero Show, David discussed the importance of having a guaranteed 0% loan provision in your LIRP. Beware: even if an insurance company has a guaranteed 0% loan provision, there's still another way that they can get you. There are two ways in which they can configure these loans: they can either charge you interest in advance or they can charge you interest in arrears. In the case of interest charged in advance, the insurance company charges you the interest rate at the beginning of the year in which you request a loan. If they were charging you 3% on a $100,000 loan, you would owe them $3000 at the beginning of the year. This means that since you need to pay out the interest at the beginning of the year – instead of at the end of the year – you lose out on the interest that money could have earned you had you been able to keep it inside your growth account and compounded it over the course of a year. With interest charged in arrears, on the other hand, you get charged the interest at the end of the year. This means the situation is very different, as you will have on hand the interest that they credited to your loan collateral account – and it pays for the cost of that loan. David shares that there's an insurance company out there that does charge interest in advance but goes about it differently. They credit your loan collateral account at an interest rate that's greater than the amount they charge you in advance – to compensate for the opportunity costs you lost out over the course of a year. In case you have a LIRP and would like to know whether your insurance company has interest in advance or arrears and what implications that might have, David recommends heading over to DavidMcKnight.com. You'll be connected to an elite member of the POZ advisory group.  The Index Universal Life is the policy David prefers and recommends. The insurance company doesn't treat the premium the way a normal investment would get treated. There's a problem you may face, the problem of opportunity costs. As David explains, ”if I give you a dollar that I didn't really need to give you, not only do I lose that dollar, but I lose what that dollar could've earned for me, had I been able to keep it and invest it over the balance of my life.”  According to David, the ideal scenario is working with a company that charges interests in arrears, offers a guaranteed 0% loan, and sweeps your money out of that on a daily or weekly basis.

David's upcoming book, The Infinity Code, is a novel that talks about important financial concepts and themes, and that will keep you on the edge of your seat through the entirety of the read. The book will be available on Amazon and other stores soon. In David's opinion, starting a LIRP is a bit like getting married, so it's important to be meticulous in your research. When it comes to LIRPs, the IRS allows you to take a loan – the way these loans work is that instead of taking a loan from your cash value itself, you're taking it from a life insurance company. A zero cost loan, also known as a wash loan, is when, for example, you were charged 3% by the life insurance company. In order to make it an arms' length transaction, the amount they charge you and the sum they credit you is always the same. David warns against going for loans that don't have a guaranteed 0%. In an ideal-case scenario, you'd have tax-free and cost-free distributions. One of the issues that may raise has to do with the fact that for the IRS, if a person doesn't have at least $1 in their cash value when they die, then all of the tax-free loans they got along the way need to have their taxes paid back, all in the same year.  David strongly believes that 0% spread loans are one of the stipulations that you must insist upon, when it comes to a LIRP. The cash value of a life insurance company might sound great, but it really is inconsequential when compared to what David sees as the most important provision: your loan provision. If you decide not to opt for a 0% spread that's guaranteed, then you run into the risk of having life insurance companies adjusting that in order to hit their quarterly forecast. Hence, it's paramount that you ask for a guaranteed 0% loan. For David, a good loan provision charges no net interest to the client, and it's also worded in a clear and unambiguous way. A band loan provision, on the other hand, not only has net interest, but it's also worded using nebulous terms, and has convenient escape clauses (convenient for the life insurance company, that is). David isn't convinced that most of the financial services industry understands the implications of these types of loans. Therefore, he recommends that, before you go down the road with a financial advisor talking about an LIRP, you insist upfront that they tell you all of the details of the loan provision of that particular contract. You should be familiar with your loan provisions because, otherwise, they will come back to bite you. The loan interest will accumulate, it will compound over time, and it will force you to go bankrupt years in advance than when you ever thought possible.

Inflation is here, the question is “Is it here to stay?” Consumer prices soared in October 2021 and are up 6.2% from a year earlier, the fastest increase in over three decades. We've grown accustomed to inflation of 2% a year, so the current level of inflation is considerably higher than economists have expected and is having some serious impacts on people's daily lives. High inflation will likely be with us well into 2022 and beyond. The reasons prices are rising are complex. One of the variables is supply and demand and for goods ordered online, demand has far outgrown the ability of the market to produce. We have grown accustomed to ordering online and that trend is likely here to stay. Shipping container costs from China have increased, in some cases up to 15 fold, and those prices have to be passed on to consumers in order for the supply chain to still function. The same is true with labor, and those increased costs are the unintended costs of the increase in demand. Increased demand and reduced supply is the perfect formula for increased inflation over time. Supply chain conditions continue to be stressed which is only exacerbating the problem of disruption and increased prices. There are over 500,000 shipping containers in Southern California alone waiting to be offloaded and processed. From shoes to hot tubs, there is no industry that is unaffected by the supply chain disruption. These challenges are going to continue for the next year at least. We should be getting used to higher prices as the new normal. Paul Tudor Jones says inflation is here to stay, and it poses a major threat to the US economy. Maya MacGuineas feels the same way. Inflation is not just a supply and demand issue, it's also being driven by the money printing that has happened over the past decade and which has recently exploded during the pandemic. We have a tremendous amount of money that has been injected into the economy, and when you have more dollars chasing fewer goods, that drives prices up. In a rising-inflation environment, you don't want to invest in a fixed-income vehicle. Stocks and equities are better options. From the Power of Zero perspective, the number one threat to your retirement is longevity risk. If you have guaranteed lifetime income, it must be indexed to inflation. If your pension and/or Social Security are not enough to cover your living expenses in retirement, the shortfall should be covered by an annuity, but to protect against inflation, the annuity needs to be a particular type. If your annuity is not adjusted for inflation, a high-inflation environment can kill your retirement portfolio. A fixed indexed annuity that's linked to the growth of the stock market protects you from that risk. For the rest of your stock market portfolio, you need those dollars to compound in a fairly aggressive way to keep pace with inflation. With your basic needs covered, you have a permission slip to take more risk in your stock market portfolio. This also allows your portfolio to recover during down years instead of forcing you to take money out during those years which can put your portfolio into a death spiral. The LIRP is another excellent place to draw money for discretionary expenses during the years the market is down. The Volatility Shield covers this strategy in depth.     Mentioned in this Episode: How the supply chain caused current inflation, and why it might be here to stay - pbs.org/newshour/amp/economy/how-the-supply-chain-caused-current-inflation-and-why-it-might-be-here-to-stay Paul Tudor Jones says inflation could be worse than feared, biggest threat to markets and society - cnbc.com/2021/10/20/paul-tudor-jones-says-inflation-could-be-worse-than-feared-biggest-threat-to-markets-and-society.html

The situation with the Biden infrastructure plan continues to evolve. Senators Joe Manchin and Krysten Sinema have continued to be obstacles in the Democrats' way from getting the bill passed.  The Democrat caucus has been in disarray and seems to be pulling in different directions. Biden was hoping the bill would pass by having everyone vote before the legislation was written prior to him landing in Rome. Right now, it looks like things are dead in the water including raising tax rates on the rich. The big question is whether the Trump tax code will remain in place until 2026. Joe Biden has expressed his desire to raise taxes on the rich, and the easiest way for him to do that is to simply let them expire. For most Americans, this means that if you want to shift your money from tax-deferred to tax-free, you have just five years left. The fewer years you have to shift your money, the more likely you are to rise into a tax bracket that is going to give you heartburn. Whatever happens in the next week is going to determine how people plan for retirement in a significant way and is going to determine the legacy of the Joe Biden presidency. Will Congress simply change the laws regarding Roth accounts? Not likely. To do so at this point would cause political and economic chaos. The Roth IRA is also one of the accounts that both the federal government and the average American likes. If anything, the government will try to make the Roth IRA even more attractive in order to raise more tax revenue now. David is currently writing a new novel based on the very real threat of the Modern Monetary Theory to America. There is a massive fiscal gap in the US of $239 trillion dollars which is going to have to be dealt with eventually, but the Modern Monetary Theory has been saying the debt is nothing to worry about. Modern Monetary Theory is becoming more in vogue recently with many politicians advocating it as a solution to our economic woes. Inflation is already here. We feel it at the grocery store and in our everyday expenses, but we are just at the tip of the iceberg. There is no question that inflation is coming, but whenever MMT proponents are asked about it, it's never their fault. We have been practicing MMT for decades at this point, and eventually we will get to the point where interest rates begin to rise toward historical averages. When that happens the interest on the debt will consume the federal budget. Social Security, Medicare, and MediCaid are tied by law to inflation, so when money is printed to pay for those programs their cost goes up commensurately. It's not possible to print enough money to solve the issue. Longevity risk is a major concern for all retirees, and one of the ways to mitigate it is with the 4% Rule, or what some economists now call the 3% Rule. The trouble is the rule is a very expensive way to mitigate the risk. The alternative is with a guaranteed income annuity.  The financial industry has accepted the reality of longevity risk and the benefits of annuities in mitigating that risk, but since the standard is to implement that annuity in the tax-deferred bucket it comes with a number of drawbacks and other risks. Some companies allow for piecemeal Roth conversions which allow you to convert that annuity money to tax-free. For people who say annuities are not for them, they aren't going to like Social Security or their company pension plan since they operate exactly the same way. The Power of Zero paradigm basically says that tax rates are going to rise dramatically in the near future, and when you have the majority of your money in tax-deferred accounts like 401(k)s and IRAs, you are at risk. David advocates for five or more streams of tax-free income including the Roth IRA, Roth 401(k), Roth conversions, and LIRP. The LIRP stands out because of its additional features of mitigating long-term care and coming with a death benefit. Very few Americans will be exposed to the estate tax even if it's lowered by Joe Biden. There are strategies you can use to avoid going past that threshold. David's number one tip as a father of seven is that you have to remember to stop and smell the roses along the way. Have a long-term perspective and know there are precious moments that will pass you by. Starting a life insurance policy is like getting married, it only really works if it's until death do you part. You have to make sure you have a list of things in mind when picking a policy. They are long-term contracts so have a long-term perspective when choosing one. Required Minimum Distributions may be impacted by the Secure Retirement Act working its way through Congress right now, but RMDs only affect 20% of Americans since most people will be accessing in excess of their RMD. The death of the stretch IRA is a big deal and puts an emphasis on converting your IRA to tax-free today. Even if you think your tax rate is higher now, it may still be lower than your kid's tax rates in which case you should strongly think about doing Roth conversions today.

Josh and Jay dive into Life Insurance Retirement Planning, commonly called LIRP. Living longer, having more years in retirement, potentially rising income taxes and uncertainty in the market are all common reasons that investors look for more tax-efficient and stable income sources in retirement. LIRP is one strategy that can potentially help you not outlive your money in retirement. Tune in to learn more! Want To Know More About Josh and Jay? You can reach out to Gulf Coast Financial Advisors to set up a no-cost, no-obligation discussion about your particular needs by call 251-327-2124, emailing jnull@gulfcoastfa.com, or setting an appointment on our website at Gulf Coast Financial. Independent and semi-independent agents and advisors can reach Jay Stubbs at jaystubbs.com. ////// Disclosure: Advisory services offered through Prime Capital Investment Advisors, LLC (“PCIA”) a federally registered investment adviser. PCIA: 6201 College Blvd., 7th Floor, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management (“PCWM”) and Qualified Plan Advisors (“QPA”). PCIA and Gulf Coast Financial Advisors are not affiliated. Gulf Coast Financial Advisors (GCFA) , Prime Capital Investment Advisors (PCIA), Prime Capital Wealth Management (PCWM) and Qualified Plan Advisors (QPA) do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. The information provided herein is not a complete analysis of every material fact regarding any strategy; it is intended only to provide insight into the opinions of the author. You should consult your own tax, legal and accounting advisors before engaging in any transaction.  

David gets variations of one question pretty frequently whenever he gives one of his presentations, whether that's in front of financial advisors or members of the general public. At the end of the workshop, there are five takeaways. The first is that tax rates are likely to be dramatically higher in the future than they are today. Mathematically speaking, we are past the point of no return. The second is that the only way to truly insulate yourself from the impact of higher taxes is to get to the zero percent tax bracket. The third is that it is nearly impossible to get to the zero percent tax bracket with only one stream of income. This is where most people stumble. Invariably at the end of the presentation, someone will come up and ask what the other streams of tax-free income are despite having just gone over six different streams during the presentation. People tend to fixate on the LIRP and forget about the rest. The LIRP is great, but it has a narrow focus and doesn't do enough to generate a stream of tax-free income on its own. Typically, David recommends diversifying your tax-free streams of income because each one is unique and accomplishes different parts of the strategy. Getting to the zero percent tax bracket is like fitting pieces of a puzzle together. Only when you fit them all together does the zero percent tax bracket come into play for you. The first stream is the Roth IRA. If you're younger than 50, you can contribute $6000. If you're older than 50, you can contribute $7000. The thing that makes the Roth IRA unique besides being tax-free is that when you put money in, you can take money out right away. It's the only tax-free stream of income with that feature. The Roth 401(k) is unique because it's part of a company plan and they will often have inducements that go with it. The Secure Retirement Act 2.0 that is working its way through Congress will also allow you to direct that match to your tax-free bucket. This company match is free money and that's something you should always take advantage of. The Roth conversion is unique because it can be the workhorse for your retirement planning. It allows you to convert as much as you want to tax-free because there are no limits at the moment. If you have a lot of money in your IRA ($10 million+), it probably makes sense to convert all of that money before tax rates go up next year. Required Minimum Distributions are interesting in that they come from your tax-deferred bucket. The idea is that the balance in your IRA is low enough that your RMDs at age 72 are equal to your standard deduction and don't cause Social Security taxation. RMDs are the only strategy where you get a deduction on the front end, the money grows tax-deferred, and you can take it out tax-free, also known as the holy grail of financial planning. The LIRP has a lot of things going for it, but one thing that really stands out is the death benefit. Should you die prematurely, your heirs get a death benefit. With the right LIRP, you can also receive that death benefit in advance of your death for the purpose of paying for long-term care. This avoids the heartburn of paying for something you hope you never use. Social Security is the final stream of tax-free income. As long as your provisional income is below certain thresholds, it's tax-free and functions a lot like an annuity. It can help you mitigate longevity risk, inflation, and sequence of return risk. The longer you live, the better it gets. The Power of Zero approach is built around having multiple streams of tax-free income. This is also how you know whether an advisor is following the true Power of Zero plan. Each stream of tax-free income is unique in its own right and contributes something to your retirement plan that none of the others can do. 

Mark Parrett and Steven Manuel respond to 3 diferrent accounts of “my advisor told me…” anecdotes from viewers: (25:00) 1. How much should I invest in my new business?  2. Should I put everything toward retirement when my family wants to invest in real estate? (38:15) 3. Should I dump all my money into a LIRP? (51:00) They also gab about run-ins with celebrities (1:00), BBQ updates (6:00), and Steven introduces a pet segment: Orators' Corner (17:30).

Mark Parrett and Steven Manuel respond to 3 diferrent accounts of “my advisor told me…” anecdotes from viewers: (25:00) 1. How much should I invest in my new business?  2. Should I put everything toward retirement when my family wants to invest in real estate? (38:15) 3. Should I dump all my money into a LIRP? (51:00) They also gab about run-ins with celebrities (1:00), BBQ updates (6:00), and Steven introduces a pet segment: Orators' Corner (17:30).

Dr. Larry Kotlikoff is the foremost expert in the world on fiscal gap accounting and has done a great job transforming how we should be thinking about a nation's debt. Dr. Kotlikoff recently stated during an interview that most retirement planning is wrong.  According to Dr. Kotlikoff, the basic problem with financial planning is that the goal of our life is not to accumulate wealth so that people can charge us fees on our assets. It's about having the best lifestyle we can, given our resources, so we don't end up on the street if the market crashes or we live to be 100 years old. You don't necessarily need to pay someone to manage your assets, but it can be worthwhile to have someone help you stick to your objectives. Most people without a financial advisor participate in emotionally driven investing, which is why the average investor's returns suffer. Saving for retirement is a requirement in consumption smoothing, but there is an optimal amount to save. Once you know what you have, you know what you can spend. Part of the job of a good financial planner is helping you reverse engineer what you need to create the lifestyle you want in retirement. This is where the Power of Zero paradigm deviates from mainstream financial planning. You have to get the tax part of the equation right. It's not enough to know what you should be saving, because if you execute that plan in your tax-deferred bucket and watch as tax rates rise over time, you'll find that your financial plan only delivers about half what your lifestyle needs. You need to contribute the right amount of money into the right kinds of accounts. Dr. Kotlikoff feels the stock market is overvalued and dependent on the Federal Reserve's support to maintain its levels. Market timing is tricky at the best of times. Statistically, it's nearly impossible to do. Over the course of a given year, that 80% of the rise in the market occurred on 6-8 days and you have to predict exactly which days those are going to be.  If you can guarantee your lifestyle expenses with your Social Security, pension, and/or a guaranteed lifetime income annuity, you can take much more risk in the market.  A good rule of thumb if you need to dip into your assets during a down year is to take money out of your LIRP instead of your stock market portfolio. Dr. Kotlikoff recommends that you push off taking Social Security for as long as you can to mitigate longevity risk. The key here is predicting how long you are going to live. The worst thing that can happen to you is push it off until age 70, and then die at age 71. The best way to predict how long you are going to live is to go through the LIRP underwriting process. When an underwriter accepts you, they are basically betting that you are going to live a long, healthy life, and you can use that to push Social Security off as long as possible. Is paying off your mortgage early smart? The question we should be asking is whether we “should take money that could be invested in the stock market or pay off a mortgage early?” When you look at the arbitrage between the market and your mortgage, the math doesn't add up. Converting money to an IRA has to be done over a period of time to avoid paying more taxes than necessary. We are in a rising tax rate environment, so it makes sense to take advantage of today's historically low tax rates, but it has to be done systematically. You shouldn't be drawing Social Security during your conversion period because it will cause Social Security taxation and lock you into a lower amount. There are secrets to all stages of the life cycle. When you're young, stay home to save on housing costs and don't borrow for college if there is a reasonable likelihood you might drop out. Invest more in stocks as you age in retirement, especially if you have your lifestyle needs guaranteed already. Mentioned in this Episode: Medicine's Golden Age Is Dawning. 10 Stocks to Play the Latest Innovations. - barrons.com/articles/medicine-healthcare-stocks-roundtable-51632527474

In August 2016, the University of Michigan began a trend by offering their football coach a split-dollar life insurance arrangement as an alternative to deferred compensation. Other football coaches in different schools have similar arrangements. The overarching principles of these kinds of plans can apply to you as well without having to be rich or famous to take advantage of the benefits. This is a program where the employer agrees to loan dollars to an employee, generally over a period of 7 years, that are invested in a cash accumulation life insurance policy. Unlike traditional life insurance policies where you want the highest death benefit at the lowest premium, these plans are the opposite. The plan is attempting to mimic the best aspects of the Roth IRA without any of the limitations, and there are a number of limitations of a Roth IRA that would make them unattractive to people like Jim Harbaugh. At some point, the loan will be repaid, but in the meantime policy cash flow in excess of the balance can be accessed tax-free to supplement cash flow in retirement. It's a win/win arrangement for both parties. For the employer, they incentivize the coach to stick around and for the employee, they get to take advantage of a tax-free accumulation tool that otherwise wouldn't be available to them. As good as the arrangement is, it can be improved upon. Interest-free is not cost-free. Every year Jim Harbaugh has to pay tax on imputed income. Since the money is broken out over 7 years, the interest rate ebbs and flows, and the cost to him is variable. Jim Harbaugh won't know the full extent of his imputed income until the final seventh installment has been made. If they were to do this deal again, it would make more sense to make the loan all upfront and lock in the interest rate. The key to this approach is having an accumulation tool that's going to grow the money to the point where it far exceeds what the repayment of the loan has to be. Without that tool, you won't have the ability to grow. Rumour has it that the arrangement with Jim Harbaugh involved a whole life policy, but when they compared that to an indexed universal life policy it could have been even better. This kind of arrangement has two key components: the money has to grow safely and productively (net of fees 5% to 7%), and you need to look at how you get the money out. With whole life policies, we know they can have a net cost of borrowing. The problem comes when there is an arbitrage between the rate on your collateral account and the loan rate. One of the most important provisions in the life insurance retirement plan contract is the loan provision because if you give them 30 years to make up their mind, it's not always going to be in your favor. At its core, the purpose of the program is to promote the long-term retention of the employee in a tax-efficient manner. It works best when the employee is able to receive the maximum benefit possible from the dollars provided in exchange for expressing a long-term commitment. All of this reinforces the virtues of the life insurance retirement plan. Wealthy coaches have used this type of arrangement because they have attributes you can't find in any other type of retirement plan. There is no income limitation or contribution limits, and you can take the money out tax-free and potentially cost-free, and it comes with a death benefit.   Mentioned in this Episode: Why College Coaches Are Being Paid With Split-Dollar Life Insurance - fa-mag.com/news/why-college-coaches-are-being-paid-with-split-dollar-life-insurance-56010.html?section=

The 3% Rule says that if you want to have $100,000 per year in retirement, you would need $3.3 million saved up, which is not very attainable for most Americans. If you can offload longevity risk to a company that can handle it better than you can, you have to save far less. If you take a portion of your liquid investment portfolio and purchase an annuity, you can potentially achieve the same income flow at roughly half the cost. An annuity from an insurance company also mitigates withdrawal rate risk. If you have an income guaranteed in retirement by an insurance company, you won't have to rely on your stock market portfolio to take care of your lifestyle needs. Long-term care risk is one of the most pernicious risks for most Americans. Almost, but not quite dying, is much worse than simply dying. In that case, the surviving spouse is often left with a subsistence living instead of the retirement lifestyle they planned for.  People don't love paying for long-term care insurance for a variety of reasons, but there are alternatives to traditional long-term care insurance that accomplish most of the same things. If you give an insurance company a chunk of your liquid assets, they will give you a guaranteed stream of income that will live as long as you do. Your assets get pooled with thousands of other people's and statistical averages work everything out over time. Mathematically, the single premium immediate annuity is going to give you the most bang for your buck but there are three things that people tend not to like. The first is giving up some amount of liquidity, the second is the lack of inflation protection, and the third is the risk of dying early.  The alternative is a fixed index annuity, which allows you to tie the growth of your income to a stock market index. This protects you from inflation, comes with a death benefit, and gives you a period of liquidity which addresses the three biggest concerns that people have with instruments that guarantee lifetime income. Your income in retirement can be guaranteed, but if you do that out of your tax-deferred bucket, the after-tax amount is not guaranteed. To plug that hole, most Americans dip into their stock market portfolio. This can also result in social security taxation, leading them to spend their stock market portfolio even faster. You should think very carefully before dropping a large amount of money into a single premium immediate annuity that doesn't have the ability to do a piecemeal Roth conversion. The Life Insurance Retirement Plan comes into play in retirement when you need to pay for discretionary expenses, typically after the 10 year mark. The years where the stock market is down are the perfect time to take money out of your LIRP. The LIRP is the perfect vehicle to fund discretionary needs like plugging the hole in your roof or taking the grandkids to Disney World without withdrawing anything from your stock market portfolio. Most LIRP companies also allow you to receive your death benefit in advance of your death to pay for long term care. If you die peacefully in your sleep, your kids can inherit the death benefit which negates the feeling of paying for something you never receive. The ideal amount of money to have in your taxable bucket is about six months worth of expenses. Any more than that is a great candidate for funding your LIRP. It's crucial for life insurance that the money be growing safely and productively. With some products, your cash value ebbs and flows with the stock market. There are scenarios where people can run out of money and death benefit, as well as long-term care. A whole life policy or an indexed universal life policy are your best choices. David favours the indexed universal life policy for most people. The IRS has strict limits on how much money can be put into a life insurance policy. Those limits were premised on what the interest rates were over time, but since interest rates have changed, they adjusted the rule and consumers can put almost twice as much money into those programs for the same amount of death benefit. People up to the age of 62 can still make use of the LIRP since they still have time to let it gain steam. Once you get to the age of 65, it's not the best option if your objective is to accumulate wealth. Insurance companies are in the business of predicting how long you will live so the viability of the LIRP is directly related to your health and life expectancy. If you can figure out which spouse is going to live the longest, it informs many different decisions regarding the overall retirement plan.  Joe Biden will likely honor his campaign promise to not raise taxes on anyone making less than $400,000, which means there's a lot of opportunity to take advantage of the tax sale of a lifetime before taxes go up for good.

This is an apolitical podcast. The goal is to call out fiscal irresponsibility no matter what side of the aisle it’s on. It’s less about politics and more about math. Joe Biden recently came up with a proposal to reform capital gains taxes. The increased revenue that is thought to come from this reform is earmarked to pay for childcare, universal pre-kindergarten education, and paid leave for workers. The state of capital gains taxes currently is that if you are in the 10% or 12% tax bracket you don’t pay any capital gains taxes. It currently sits at 20% for people above those brackets and for people making more than $250,000 per year there is an additional surtax of 3.8%. This puts the baseline for wealthy Americans at 23.8%. When it comes to capital gains tax, there are four different taxes that may come into play. The first is at the federal level, then there are also state capital gains taxes and local capital gains taxes in some parts of the country, and finally the Obamacare surtax. The Biden proposal basically says that anyone who makes more than a million dollars per year would see their federal capital gains tax go from 20% to 39.6%. If you lived in New York City and included the other governmental layers of capital gains taxes, this would result in a total capital gains tax of 58.2%. Residents of Portland, Oregon would be looking at a capital gains tax of 57.3%. This doubling of the federal capital gains tax rate would generate roughly $1 trillion in additional revenue. This proposal will not likely pass through the usual route and would likely have to come through budget reconciliation. In its current form, the proposal will not likely pass because there are Democrats who believe that the tax is too high. Most people see the bill as the initial salvo in the negotiation process and the end result will be somewhere in the middle. Compared to other countries, this proposal would put America at the top of the list for capital gains taxes. If you make more than a million dollars per year, this proposal will likely affect you quite a bit. If you make less than that, you won’t have to worry about it. If you’re concerned about capital gains tax rates, you need to stop accumulating huge amounts of money in your taxable bucket. Raising capital gains taxes is not going to solve our country’s problems. We need to see broad base increases in taxes across the board and dramatic reductions in spending. If you want to protect yourself from the inevitability of higher capital gains taxes, you need to stop accumulating money in your taxable bucket and take advantage of all the tax havens that are available to you. The Roth IRA and Roth 401(k) are great options and allow you to put a lot of money into tax-free vehicles. There are unlimited amounts of money that can be converted to the tax-free bucket with Roth conversions. The LIRP is the great antidote to taxation in the taxable bucket. Someone is going to get your money, you might as well get something useful in exchange for it. There are no income limitations or contribution limits with the LIRP. Whether you make a million dollars a year or not, there are a number of alternatives to situate assets to grow tax-free wealth without having to worry about what’s coming down the pipe with regards to taxes. One of the fundamental issues with these tax raises is that they are always earmarked for some new initiative and never aimed at restructuring or fixing the entitlement programs that are driving the fiscal problems in our country.

When we talk about life insurance retirement plan, it is something that we want to last forever, I would never recommend for anyone to get into a life insurance policy for a short period of time, because it's going to turn out to be a very bad investment. Many people will look at life insurance retirement plans and say, Hey, they're too expensive, you should never put these plants together, there are better options. But when we look at it for what it is, if we look at it as something that we're going to have for the rest of our lifetime, what we find is that we can get them into a fee structure that will work. But before we get into those details, let me talk about some great things that life insurance retirement plan offers....Support the show (https://retirementriskadvisors.com)