Lifetime Income Strategies: Achieving Tax-Free Income Post-Retirement
As retirement approaches, creating financial stability becomes a top priority for many. Among various strategies, achieving tax-free income in retirement stands out, notably championed by David McKnight through his “Power of Zero” philosophy. This approach may not only safeguard your savings from potential tax hikes, but it may also enhance your retirement readiness. I this article, we’ll discuss how you can integrate these principles into your retirement planning and lifetime income strategies. 1. Understand the Importance of the 0% Tax Bracket The “Power of Zero” approach emphasizes the significance of striving for a 0% tax bracket in retirement. David […]
Navigating Market Volatility: Shielding Your Retirement Funds
In an ever-changing economic landscape, navigating market volatility remains a constant concern, especially for those nearing or already enjoying retirement. Fluctuations in the market can have a significant impact on retirement funds, raising the question of how to best protect your financial future against unpredictable shifts. Hanson Wealth Management, as a Power of Zero financial advisory firm, advocates for a strategic approach to safeguard retirement savings from market volatility. This article explores techniques based on Power of Zero principles to help you develop a strategy to safeguard your retirement funds, providing more peace of mind no matter the economic […]
LIRP Explained: A Comprehensive Guide to Life Insurance Retirement Plans
Life Insurance Retirement Plans (LIRPs) are becoming an increasingly popular tool for retirement planning, offering a blend of life insurance coverage and potential tax-advantaged growth. This guide explores what LIRPs are, how they work, and the key considerations for individuals thinking about incorporating them into their retirement strategy. Understanding Life Insurance Retirement Plans: What is a LIRP? A Life Insurance Retirement Plan (LIRP) is a strategy that utilizes permanent life insurance policies, such as whole life or universal life, as a means to accumulate cash value over time. This cash value can then be used tax-free under certain conditions, […]
Mastering the Zero Tax Bracket: Path to a Tax-Free Retirement
To help you on your journey toward mastering the zero tax bracket, the following content shares the best uses of your taxable bucket of investments. It is excerpted in part from The Power of Zero, by David McKnight. Attaining the coveted 0% tax bracket isn’t merely wishful thinking—it’s a tangible goal that I guide numerous clients toward achieving. However, this level of tax efficiency doesn’t materialize spontaneously. Securing a tax-free retirement demands proactive and strategic planning, and the importance of starting this journey today cannot be overstated. Every single day counts, as delaying only prolongs your exposure to potential […]
The Demographic Glitch That May Cause Your Taxes to Double
The Baby Boomer generation is well-known for being the product of the post-World War II baby boom, and for rejecting and redefining traditional values in many ways. However, did you know that the Baby Boomer generation also represents a “demographic glitch” in a way that is important to all of us? Allow me to explain. A Four-Letter Word and the Future of Our Economy On January 11, 2011, a CPA named David M. Walker appeared on national radio and made a grim prognostication: Based on the current fiscal path, future tax rates will have to double or our country […]
What You Should Know About the Three Percent Rule: Part One
In a previous article, I discussed the retirement income challenges created by longevity risk. Today, I want to talk about a common strategy for overcoming it: the Three Percent Rule. I’ll share what came before it, how it came to be popularized, and whether it’s truly the best strategy to utilize so that you can devise a retirement income withdrawal strategy that will help you enjoy a more financially secure retirement. The Historical Approach to Retirement Withdrawals For many decades, Americans managed longevity risk with a loosey-goosey approach to retirement income planning that threw caution to the wind. In […]
Why You Can’t Count on a Lower Tax Bracket in Retirement
The following content is excerpted in part from The Power of Zero, by David McKnight. A great many of my clients come to me with all their retirement savings in tax-deferred accounts. They have spent years following the advice of so-called “gurus” who say things like, “It’s ok to have all your retirement savings in the tax-deferred bucket because, when you retire, you’ll be in a much lower income tax bracket than you were during your working years.” Today, I’d like to put this claim under the microscope – and explain why this is a faulty assumption for several […]
Achieving the 0% Tax Bracket: How to Utilize Your ‘Taxable Bucket’
The following content related to achieving the 0% tax bracket and best uses of your taxable bucket is excerpted in part from The Power of Zero, by David McKnight. Achieving the 0% tax bracket is a dream scenario – and one that I help many of my clients accomplish – but it doesn’t happen by accident. Enjoying a tax-free retirement takes proactive and strategic planning, and it pays to begin today. The longer you wait, the longer you’re standing on the proverbial train tracks, with a high-speed taxation disaster racing toward you, and the less time you have to […]
Strategic Tax-Free Retirement Income: A Case Study Part III
This is the third installment of a tax-free retirement income case study that I have adapted from the book Tax-Free Income for Life by David McKnight. It may reference The Power of Zero, another book by David McKnight. In this article, I’m excited to bring you the conclusion of a case study featuring Mike and Julie, a hypothetical couple using a comprehensive approach to a tax-free retirement income. If you missed the earlier installments, catch up on Part I and Part II. In the last article, we satisfied the Smiths’ cash flow needs in their first year of retirement. […]
Strategic Tax-Free Retirement Income: A Case Study Part II
This is the second installment of a tax-free retirement income case study that has been adapted from the book Tax-Free Income for Life by David McKnight. It references The Power of Zero, also by David McKnight. Most of the articles you’ll read here on this blog cover one or more aspects of a comprehensive approach to tax-free retirement income. In my last article, I introduced a case study featuring hypothetical couple Mike and Julie Smith in order to illustrate what it looks like when you put all the pieces of the puzzle together. In this second installment, I’ll pick […]
