Me a hot seller when insurance agents bought them to give to their prospects Go figureWhen I read a book that is written as advertising material I tread lightly I look to see if there is any value beyond getting informed on some new product Here the value I received with in the initial problem description forecasting increasing taxes I already nderstand this issue but it was interesting to read someone else s take on
"it My second takeaway was the reminder that this kind of life insurance "My second takeaway was the reminder that this kind of life insurance exists If the need arises while I m managing my investments I ll know my insurance guy will have something to sell me He always does Missing key elements I was disappointed The author did not address a better way to land in the 0% tax bracket and that is through capital gains and dividends A lost opportunity Instead he Understanding Yandere Lovers uses the expensive option of LRIPs The author glosses over many points that don t fit his argument that need to be addressed to convince the reader of the effectiveness for his solution I would recommend the blog Go Curry Cracker over this book It is too bad that a respected name like Ed Slott associated his name with this book I learnedite a bit to tilize in my stress free discussions about retirement While I
think tax planning for retirement is often overlooked I was not a fan of this book tax planning for retirement is often overlooked I was not a fan of this book a few reasons1 McKnight s math is imprecise and may give readers the wrong impression While he goes into marginal tax brackets later in the book he largely writes as if your top tax bracket is indeed what you pay in taxes However most people pay significantly less For instance in his Social Security example in the tax deferred chapter the hypothetical couple with 95000 in taxable income would have an average tax rate of 15% not 22% according to tax rate calculatorsHe also talked extensively about how the current tax brackets will expire in 2026 but fails to mention that the standard deduction will also drop in half at that time He even talks in later chapters about how a couple could safely take out RMDs of 37000 and have it be tax free thanks to an inflation adjusted standard deduction But assuming the tax law sunsets as scheduled we will never see a 37000 standard deduction2 He completely ignores certain planning strategies such as Health Savings Accounts to pay for health care expenses or relocating to a state with no income tax that can help people minimize taxes in retirement 3 McKnight never mentions Roth 401k accounts4 He promotes LIRPs heavily without providing much detail Vague descriptions tend to always This book focuses on strategies sed to shift taxable income and tax deferred income into tax free income The logic being that with tax brackets at historically low levels today and with the huge deficits our government is incurring and its need to someday pay the bill now is the time to bite the bullet and recognize income pay taxes instead of waiting deferring taxes Brothers until a later year when Uncle Sam will want a bigger pound of flesh The two strategies recommended were 1 rolling your traditional IRA or 401k into a ROTH IRA in a method known as a backdoor rollover and 2sing insurance annuities I m not a fan of the latter for various reasons but mainly because today s low interest rates makes the guaranteed aspect of the annuity less valuable However with respect to the ROTH the information provided was helpful and I expect to talk to a retirement specialist about whether that makes sense for my situation Worthwhile info to consider when planning for retirement ick read but sti. Xperts have even suggested that tax rates have to double just to keep our country solvent Unfortunately if you’re like most Americans you’ve saved the majority of your retirement assets in tax deferred vehicles like 401ks and IRAs If tax rates go p how much of your hard earned money will you really get to keep In David McKnight’s ground breaking book Th.
David McKnight õ 2 ReadA ick and easy read that ll cause one to reconsider a few aspects of personal finance and retirement planning Thesis Tax rates will rise in THE FUTURE AS THE US GOVERNMENT future as the US government struggle to pay for nderfundedunfunded liabilities such as social security medicare and medicaid As they get sueezed for money they ll inevitably turn to taxpayers for additional sources of revenue
CURRENT TAX RATES ARE AT HISTORICALtax rates are at historical and can only rise in the future Therefore paying taxes now to end La muralla verde up in the 0% tax bracketpon retirement is beneficialPros David introduces many interesting concepts such as paying all taxes now to avoid them later on And also that tax rates will
Inevitably Increase Traditional And Rothincrease Traditional and Roth won t be that different in the end AND Roth IRAs are taxed at current known tax rates whereas Traditional IRAs401ks have an The New Competition uncertain tax rate in the future Keeping post retirement income to below standard deduction which rises with inflation in order to My State Farm agent sent me this book to read before our annual meeting to discuss my insurance portfolio and that is the most adult sentence I have ever typed Anyway I read it because he asked me to and I did learn stuff about various kinds of retirement funds and the like It definitely counts towards my 2019 reading goal because dang it I read it An exceptional read that makes you think about retirement planning in a whole different way It is relatively easy tonderstand however if you have a finance background it s a much easier read and well worth the time This is one of those books that was created to try to sell you something In this case it s trying to convince the reader that they have an issue with their savings plan and that there is a way to pay zero taxes that only a few rich people currently know about The solution involves Domestic Slavery Considered as a Scriptural Institution by Francis Wayland and Richard Fuller using a variation on life insurance You ve been warned I actually thought the first part of the book which lays out the forecast of much higher income tax rates in the US and the impact on different retirement savings vehicles was interesting if lacking in detail The author conveniently ignores things like capital gains tax and dividend taxes that are currently at a lower rate than income taxes and I suspect that will be the case even if his forecast of tax increases occur And he ignores other tax planning schemes that those rich life insurance owners also avail themselves of like trusts and corporations I would agree that tax rates can and likely will rise from where they are now And some thought should go into investors tax planning due to that eventuality So the problem statement is a good story But what of the offered solution The author focuses on the scheme of buying specific life insurance policies that have additional features and when you read additional features you correctly think additional costs that allow for additional investment borrowing your invested money without repayment andse as a long term care annuity It s described a lot like Saturday Night Live skit it s a floor wax and a dessert topping As you read you want to evaluate this product But alas the author really provides no details instead begging off because there are hundreds of different policies with different costs and different benefits You can t even validate the claim that you can live off the proceeds of your savings without paying taxes because there s not enough detail even in the chapter length case study Your only recourse is to visit your local insurance broker Not surprisingly the author mentions that the book beca. There’s a massive freight train bearing down on the average American investor and it’s coming in the form of higher taxes The United States Government has made trillions of dollars in promises for programs like Social Security and Medicare it simply can’t afford to keep The only way to deliver on these promises is to raise taxes It’s simple math Some Ll a little long winded due to a bit of redundancy Also worth mentioning some aspects of the strategies presented in this book are based on speculation but then again what investment strateg Due to our country s current historically
Low Income Tax Rates Davidincome tax rates David the
author of The Power of Zero feels that now is the best time to se non deductible savingsof The Power of Zero feels that now is the best time to se non deductible savings in our retirement plans Taxes will never again be this low according to McKnight His opinion on this is based on our growing record debt and the Children of the New World underfunded Social Security problem The current tax rates phase out in 8 years by which time the need to dramatically raise taxes will be indisputable People saving for retirement today will have to pay taxes on reuired EMD withdrawals from their 401K s and their IRA s at much higher future tax rates while those with money in non deferred savings instruments will pay the lowest taxes or for a few prescient ones no taxesIt isn t necessary to reduce a future retiree s tax deferred savings to zeronder McKnight s proposed plan Most of The Oswald Reflection us already have 401K and IRA retirement savings accounts When we retire we should be able tose the standard deduction in the year of ERM withdrawal to shield that money from taxes assuming that the total value of those accounts isn t too large to do so One enlightening passage addressed the taxability of Social Security income Non taxable sources of income are considered by the IRS when determining how much of a person s social security income is taxable Municipal bond income is one of the sources that get into that calculation Even though muni income is not subject to federal income taxes it may be subject to state and local income tax and even if not taxed by the state of residence it is The Rabbit Who Wants to Go to Harvard used in the total income calculationsed in determining social security taxation A formerly Quantum (Captain Chase unknown retirement avoidance tool that was mentionednknown to me that is is the LIRP Life Insurance Retirement Plan Congress allows a taxpayer to buy life insurance with large periodic payments The bulk of the payments add directly to the cash value of the policy with a small portion going toward the cost of the insurance itself The death benefit and cash surrender value go to our beneficiaries tax free with the result that none of that money being subject to estate tax or to income tax The benefit to the purchaser of the policy is that the cash values in these policies are liuid The purchaser can borrow those funds back at any time for any purpose The borrowings carry a modest interest rate to legitimize the transaction as a loan to the IRS but the loan is an investment of the insurer and its interest earnings are added to the policy s cash surrender value I regret that the author did not provide the names of insurance companies who sell these types of policies as I was nable to find any with a google searchRetirement plans are as individualistic as any form of investment plan I ve tried doing it on my own but after reading The Power of Zero I realize that I have left myself open to paying taxes than I could have had I taken a different savings tact prior to retirement Don t make the same mistake We re all hoping to enjoy a healthy fun filled retirement someday IRS reuired minimum distributions are
"unavoidable so part of our retirement plan needs to include a strategy for "so part of our retirement plan needs to include a strategy for the tax conseuence they represent Read The Power of Zero and other retirement books as they all provide ideas and raise issues that need to be considered and addressed in a good retirement plan. E Power of Zero he provides you with a step by step roadmap on how to get to the 0% tax bracket effectively eliminating tax rate risk from your retirement picture Why is the 0% tax bracket so powerful Because if tax rates double two times zero is still zero The day of reckoning is fast approaching Are you ready to do what it takes to experience the power of ze. .