Episode
How I'd Invest $2 Million Right Now
- Podcast
- The Power Of Zero Show
- Published
- Apr 29, 2026
- Duration seconds
- 622
- Processing state
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Summary
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're no longer just investing for growth; you're investing for income. Remember: If you get this wrong, you don't 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're 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's in favor of annuities that have what he refers to as "piecemeal internal Roth conversion feature." That means being able to gradually convert that annuity from tax-deferred to tax-free during the annuity's 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's 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 – David explains why it shouldn't be overlooked. Moreover,…