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Every retirement plan rests on a set of assumptions. Some of these assumptions are explicit, written into spreadsheets and financial projections. Others are implicit, buried so deeply in our thinking that we never stop to question them. The most dangerous assumptions are the ones we never examine at all.
**Author:** David McKnight
**Estimated Reading Time:** 45 minutes
**What You'll Learn:** How to protect your retirement from the twin threats of rising tax rates and outliving your savings, and how to build a retirement income plan that produces tax-free income guaranteed to last as long as you live.
**Who This Book Is For:** Anyone who is approaching retirement or already retired and wants to understand how to shield their savings from future tax increases while ensuring they never run out of money.
Every retirement plan rests on a set of assumptions. Some of these assumptions are explicit, written into spreadsheets and financial projections. Others are implicit, buried so deeply in our thinking that we never stop to question them. The most dangerous assumptions are the ones we never examine at all. For decades, the conventional wisdom about retirement has been remarkably stable. Save diligently. Invest in a diversified portfolio. Withdraw a sustainable percentage each year. Defer taxes as long as possible. If you follow these rules, the thinking goes, you will enjoy a comfortable retirement. But what if the ground beneath these assumptions has shifted? David McKnight argues that it has. The retirement landscape that today's retirees face is fundamentally different from the one their parents navigated. Two forces in particular have transformed the terrain. The first is the staggering level of national debt, which makes higher tax rates not just possible but probable. The second is the steady increase in life expectancy, which means retirement could last thirty years or more. These two forces create what McKnight calls the twin threats of retirement: tax rate risk and longevity risk. Tax rate risk is the danger that future tax increases will erode the purchasing power of your retirement savings. Longevity risk is the danger that you will outlive your money entirely. Most retirement planning addresses neither of these risks adequately. The standard advice to defer taxes assumes that tax rates will remain stable or decline. The standard advice to withdraw four percent annually assumes a retirement that lasts thirty years at most. Both assumptions are increasingly shaky. The problem is not that people fail to save enough. The problem is that even diligent savers are exposed to risks they never anticipated. A couple with a million dollars in retirement savings might feel secure, but that security is illusory if future tax rates consume a third of their income and their money runs out at age eighty-five. McKnight's approach is different. Rather than accepting these risks as unavoidable, he proposes a strategy designed to eliminate them entirely. The goal is not merely to survive retirement but to thrive in it, with an income stream that is guaranteed to last for life…
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Get the complete summary in the appTax rate risk and longevity risk are the twin threats to retirement security. Both must be addressed.
Longevity risk is a risk multiplier that amplifies every other retirement risk.
The Three Percent Rule is safe but requires enormous capital. Most Americans cannot achieve it.
Guaranteed lifetime income products eliminate longevity risk by transferring it to insurance companies.
The mortality credit allows annuities to provide more income than individual saving at half the cost.
Fixed Indexed Annuities address the shortcomings of traditional annuities by offering flexibility and growth potential.
"Tax-Free Income for Life" is a strong fit if you want practical ideas around finance, business, money, especially themes like tax rate risk and longevity risk are the twin threats to retirement security. both must be addressed; longevity risk is a risk multiplier that amplifies every other retirement risk. The MinuteRead summary distills these concepts into a focused read, whether you're deciding whether to buy the book or applying its lessons at work.
Motivated to help readers with two major risks loom large on the retirement landscape, David McKnight wrote “Tax-Free Income for Life” to package those ideas for a fast, focused read. In “Tax-Free Income for Life”, David McKnight focuses on two major risks loom large on the retirement landscape. Through “Tax-Free Income for Life”, David McKnight distills the core ideas on finance into lessons readers can absorb in a single short sitting. Readers turn to this work when they want David McKnight's …
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