{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"How I\u2019d Invest $2 Million Right Now","description":"David McKnight breaks down the approach he would follow if he were to invest a $2 million 401(k) in retirement. David points out that when you retire, you\u2019re no longer just investing for growth; you\u2019re investing for income.  Remember: If you get this wrong, you don\u2019t get a do-over. In the case David discusses, many financial advisors would recommend investing the $2 million in the market and withdrawing whatever your lifestyle requires. The problem with that way of doing things, however, is the exposure to the sequence of returns risk. If the market crashes early in retirement and you\u2019re pulling money out at the same time, your portfolio could go into a death spiral from which it never recovers. The main trap those planning their retirement and retirees should avoid is running out of money before running out of life. David touches upon the role that a guaranteed lifetime income annuity plays in retirement planning. As far as annuities are concerned, he\u2019s in favor of annuities that have what he refers to as \u201cpiecemeal internal Roth conversion feature." That means being able to gradually convert that annuity from tax-deferred to tax-free during the annuity\u2019s deferral period. David recommends investing discretionary funds with the following ratio: 70% in a total U.S. stock index, 30% in a total international stock index. He would automatically rebalance if his allocations ever got more than about 5% out of alignment. The reason why David\u2019s approach lacks bonds is simple: if your portfolio goes down in your retirement years, your guaranteed lifetime income gives you the luxury of watching it recover before you take further distributions. Long-term care is a piece of the strategy that most advisors completely ignore \u2013 David explains why it shouldn\u2019t be overlooked. Moreover, the cash value inside that policy can also act as a volatility buffer. David brings up a move that can increase the sustainable withdrawal rate on your stock portfolio from 4% to as high as 8% with a 95% confidence rate. \u201cI believe we\u2019re currently experiencing the lowest tax rates we\u2019re likely to see in our lifetime," says David. Many experts believe that by 2035, when the debt-to-GDP ratio will hit about 150%, the Federal Government would have to begin phasing in tax increases over time to avoid an all-out economic crisis. That\u2019s why David would like to convert his IRA to Roth, little by little, over the next 10 years in the most tax-efficient way possible. David provides a bird\u2019s eye view of the entire strategy, which by his own admission, \u201cchecks every single box.\u201d An Ernst & Young study looked at this type of strategy combining investments with insurance-based solutions like annuities and life insurance \u2013 David discusses its findings. \u201cI\u2019m proposing a strategy that gives you certainty where you need it most, your income and tax-free flexibility everywhere else,\u201d he adds.  Such an approach allows you to neutralize longevity risk and tax rate risks all in one cohesive strategy.     Mentioned in this episode: David\u2019s new book, available now for pre-order: The Secret Order of Millionaires David\u2019s national bestselling book: The Guru Gap: How America\u2019s Financial Gurus Are Leading You Astray, and How to Get Back on Track Tax-Free Income for Life: A Step-by-Step Plan for a Secure Retirement by David McKnight DavidMcKnight.com DavidMcKnightBooks.com PowerOfZero.com (free video series) @mcknightandco on Twitter  @davidcmcknight on Instagram David McKnight on YouTube Get David's Tax-free Tool Kit at taxfreetoolkit.com Ernst & Young ","author_name":"The Power Of Zero Show","author_url":"http:\/\/davidmcknight.com\/","html":"