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The Power Of Zero Show

The Power of Zero Show was created with the express purpose of helping 100,000 Americans get on the road to the 0% tax bracket in retirement within the next 10 years.

Is putting your entire retirement planning strategy into 30-year treasuries really the safe bet it seems?

David McKnight reveals why this approach could expose you to two hidden risks, and explains how the stock market and annuities might hold the real key to protecting your income.

In this episode, David McKnight looks at whether putting your entire retirement portfolio into 30-year treasuries is the way to go.
While it may seem like a pretty compelling argument, there’s a major problem with this strategy – and it comes down to two things: taxes and inflation.
The U.S. just crossed $40 trillion in national debt.
It will continue to grow $2 trillion per year over the next 10 years, and $3 trillion per year after that… with no end in sight.
David points out that buying a 30-year bond with this status quo isn’t just making an interest rate decision, it’s making a 30-year tax bet.
The problem with inflation is that, with a conventional Treasury bond, your retirement income doesn’t get automatically indexed to keep up with inflation.
Try to think of the impact of a 3% inflation on your income over the next 30 years.
“The issue with declaring victory at retirement and putting everything into a 5.25% 30-year treasury is that you exchange one type of risk, market volatility, for two other catastrophic risks: rising taxes and inflation”, says David.
The solution to this problem is to give different portions of your retirement assets different jobs.
The strategy starts with inflation-adjusted, tax-free, guaranteed lifetime income and continues with the so-called Volatility Shield.
David recommends paying for discretionary expenses out of your Indexed Universal Life Policy (IUL) during a flat or down market.
That will give your stock portfolio a chance to recover before you start taking more withdrawals.
That act alone can nearly double the sustainable withdrawal rate on your stock portfolio over a 30-year retirement.
When it comes to investing, David prefers allocating about 70% in a total U.S. stock market index and 30% in a total international stock market.
Remember: over a 30-year retirement, it isn’t much about how much interest you earn, it’s how much you can spend after taxes and inflation are figured into the equation.