The 12 Rules for a Power of Zero Retirement

The 12 Rules for a Power of Zero Retirement

| December 03, 2019
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Rule #1: Everyone’s situation is different, and there is no cookie cutter approach. You can’t pick up the Power of Zero book and have the exact recipe for success. It will need to be tailored to your personal situation. Rule #2: It is unlikely that you will be in a lower tax bracket in retirement. The closer you are to 2029, the less likely you are to be in a lower tax bracket. We know when the tax cuts will end and when tax rates will go up. When you look at the ten-year horizon, it’s really tough to make the case that tax rates won’t be higher. This turns conventional wisdom on its ear. We are marching into an uncertain future, and that doesn’t bode well for people that have the majority of their money in the tax-deferred bucket. Rule #3: There is an ideal balance to have in your first two buckets in a rising tax rate environment. Your taxable bucket should contain around six months worth of expenses and your tax deferred bucket balance should be low enough that RMD’s are equal to or...

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