Darcy Bergen, CEO of Bergen Financial Group, explains four key measures of the CARES Act for consumers
Amid the coronavirus pandemic, COVID-19, everyone and every business has had to make concessions. For instance, some small businesses have shuttered, many large businesses have furloughed employees, most schools have closed, and lenders have extended special repayment terms. On March 27, 2020, the federal government passed the Coronavirus Aid, Relief, and Economic Security act to provide sweeping support to consumers and businesses alike. The CARES Act introduced a range of different measures to address the economic fallout. Experienced financial planner and CEO of Bergen Financial Group, Darcy Bergen, discusses four key measures of the CARES Act designed to provide immediate assistance to consumers.
One thing most consumers share during the coronavirus pandemic is economic uncertainty. The CARES Act includes provisions designed to make accessing retirement plan proceeds easier. Darcy Bergen expounds, “While it can be relatively complex, the CARES Act essentially created a new withdrawal provision called CRDs or coronavirus-related distributions for people who are diagnosed with the disease. It allows those impacted to request up to $100,000 in distributions without being liable for the 10% early withdrawal penalty tax and/or mandatory 20% withholding. You would still be responsible for any related income taxes, but waiving these deterrents can make funds more available to consumers who may be in need.”
Another way the CARES Act provides economic relief to consumers is through a one-time individual rebate. Darcy Bergen says that “All residents of the US who have an adjusted gross income of less than $75K or $150K married may be eligible to receive a rebate of $1,200 or $2,400 for married couples.” Darcy Bergen then adds, “You may be eligible to receive an extra $500 per child.” It’s worth noting, however, there are income limits. Darcy Bergen explains “Those who earn more than the threshold limit may receive a percentage of the rebate, but it’s eventually phased out for high earners.”
Because many businesses have had to temporarily or permanently close, the CARES Act created a temporary Pandemic Unemployment Assistance Program. Darcy Bergen provides clarity, “The Pandemic Unemployment Assistance Program offers assistance for people who are not traditionally eligible for unemployment benefits, such as independent contractors, people who are self-employed, and others who may not be able to work because of the coronavirus.” Darcy Bergen continues “The bill offers an extra $600 a week to every unemployment insurance or Pandemic Unemployment Assistance recipient for up to four months.”
Student loan debt is the second-largest class of debt — second only to mortgages. It spans across all generations, and the total U.S. student loan debt balance towers at an astronomical $1.59 trillion. Darcy Bergen explains “The CARES Act provided immediate relief to student loan borrowers. All federally-held student loan payments have been automatically and temporarily paused for borrowers until September 30, 2020. During this time, interest will not accrue.”
Darcy Bergen clarifies that “The implications of the CARES Act can impact everyone differently. For this reason, it’s best to meet with an experienced financial advisor who can help you maximize your opportunities and chart the best path forward through today’s uncertain times.”
If you’re like most Americans, you’re looking forward to the time when you don’t have to answer to the alarm clock anymore. You want your own time and space to do whatever it is that you want to do, without a boss breathing down your neck. We’re talking about that ever-elusive retirement date, and no more dealing with traffic or burnout. Today, Darcy Bergen talks about the 10 things you’ll want to consider before you retire.
1. Social Security Can Withhold Some of Your Earnings
It’s no secret anymore, Darcy Bergen begins. If you work and draw Social Security early, your benefits will be reduced $1.00 for every $2.00 you earn over the threshold of $18,240 a year ($1,520 a month) that Social Security allows. Although you’ll see this withholding added back in when you reach full retirement age, he says, it is something you’ll need to be aware of when calculating your retirement budget.
2. Consider Moving to a Low-Cost City
Your retirement dollars are going to go a lot farther in Oklahoma rather than in Hawaii, Darcy Bergen explains. The cost of living varies widely from state to state. Use this calculator to compare your city and state with somewhere else to see how far you can stretch those retirement dollars.
3. Some States Tax Social Security
4. Consider a Side Business
Many people are leaving their 9-5 jobs but not retiring, Darcy Bergen says. They’re opening their own side business from home. From online marketing to web design and eCommerce, you’ll find there’s a virtual market almost everywhere.
5. Estimate Your Social Security Benefits Now
Darcy Bergen says you’ll want to budget for retirement. For this, you’ll need a list of all your assets and liabilities, plus a list of all your monthly income and expenses and the amount you expect to earn from Social Security. For estimating your Social Security benefits, you can go directly to the Social Security website and use this handy calculator.
6. Find Ways to Stay Healthy to Avoid Unnecessary Medical bills
If you retire before becoming eligible for Medicare at age 65, you’ll want supplemental insurance. Regardless, by changing some of your habits now, you’ll possibly reduce the need for medical insurance at all. Look at some things like eating a well-balanced diet, cutting back on sugar and salt, and maintaining a healthy weight.
7. Get Busy with a Hobby or Two
Part of staying healthy, Darcy Bergen explains, is keeping your mind occupied and having a purpose. One of the best ways to stay busy is starting that hobby you never had time for when you were working. Nearly any hobby will do, ranging from woodworking to oil painting and even bird watching. If it’s your passion, Darcy Bergen says, budget now for a hobby in retirement and bring some of that extra joy into your life.
8. Drive an Older Car
Darcy Bergen says a primary reason for people being in debt is they think they need to keep up with the Joneses. Instead, she suggests learning to be content with you already have. This will increase your happiness level considerably as it cuts down on your expenses you’ll need in your retirement. Driving an older car is just one of the ways this can be done.
9. You Might Not Need as Much Invested as You Think
Most people who budget for retirement use the figure of 80% of their current expenses as their new expense figure, but Darcy Bergen says that’s not always accurate. It depends, she says, on several factors. For instance, if you have high commuting costs now, that will be gone once you retire. She says looking at your specific retirement plan will give you a better estimate of how much expenses to allocate instead of a blanket one-size-fits-all figure of 80%.
10. You Don’t Have to Eliminate Your Debt
Some of Darcy’s clients are shocked to hear this, but she says it’s true. There’s nothing wrong with a little bit of debt as long as it’s something you can manage, she adds. In fact, using a credit card for your monthly bills that pays points, cash back, or airline miles might be smarter than paying off your bills each month with cash. “That’s only if you agree to pay the card off each month,” she adds with a smile.
Darcy Bergen is the owner of Bergen Financial Group and has experience working with clients who have various financial concerns. He has over 20 years of experience as a financial planner helping his clients plan for retirement and other financial needs. While some individuals might not have substantial savings for retirement, they do have a permanent life insurance policy. Darcy Bergen shares how a permanent life insurance plan can help financially during retirement.
Advantage of Borrowing Money from Life Insurance Policy
Darcy Bergen explains that the purpose of a life insurance policy is for death benefit protection. An additional benefit of a permanent life insurance policy is the potential to borrow money from the cash value of the policy. If an unexpected expense happens, policy owners can borrow money from what they have contributed, according to Darcy Bergen. The principle is they’re basically borrowing money from their death benefit. They’re not required to pay it back, but any unpaid balance will accumulate interest, and it will be deducted from their death benefit.
Darcy Bergen Discusses Why A Life Insurance Policy Can Help With Retirement Income
With most permanent life insurance plans, policyholders can withdraw the cash value and use it as income during retirement. If a policyholder purchased permanent life insurance early in life, they could accumulate significant cash value by the time they retire. They would have a choice to use the cash value to help supplemental income. Darcy Bergen explains the amount of money policyholders can withdraw must not exceed what they have paid in premiums.
Life Insurance Can Have Cash Value
There are two basic types of life insurance, term and permanent. Term life insurance doesn’t have cash value, and it usually ends after the 20 or 30-year term is up, permanent insurance doesn’t expire. When people obtain permanent life insurance, a portion of their premiums has potential to accrue cash value, according to Bergen. A portion of the monthly payment will go towards insurance and maintenance costs, and the rest can accumulate a cash value that can be used later on in life.
Option to Pay Premium with Money Accumulated
During retirement, added monthly costs could be a concern, especially those that are on a fixed income. Darcy Bergen explains policyholders can pay for their monthly payment using their accumulated cash value if they ever have issues paying for their premiums. Using their premium to make the monthly payments will allow them to keep their death benefit without defaulting on the policy. Once they’re in a better financial state, they can go back to making the payments.
Before making decisions when it comes to planning for retirement, Darcy Bergen recommends everyone to meet with a financial advisor. For more of Darcy Bergen’s financial tips on retirement, check out http://darcybergen.xyz/.
As the owner of Bergen Financial Group, Darcy Bergen advises clients on all matters relating to financial planning and retirement. None are as confusing for his clients, however, as the Social Security laws, he says. Here, Darcy Bergen discusses how to determine when it the best time for you to start drawing your Social Security benefits.
There are basically three primary ages to remember about Social Security, says Darcy Bergen. The first date is the earliest date you can apply for Social Security, Darcy Bergen says. If you’re qualified to receive benefits, he says, you can collect as soon as you turn 62. However, just because you can, doesn’t mean you necessarily should, he adds.
The second date is the date you become eligible for your full retirement. This is important to know, Darcy Bergen says, since this is when you’ll be able to get 100% of your Social Security retirement. This date depends on your birth date, he adds and can range anywhere from age 65 to 67.
Finally, the age of 70 is when you’ll be able to take the maximum amount of Social Security, Darcy Bergen says. Each year you delay drawing benefits after your full retirement age, your benefit will continue to increase up to age 70, he adds. After that, it doesn’t make sense to wait since it will never go higher than that.
Social Security Explained | Darcy Bergen
However, knowing when to apply for your Social Security isn’t just a matter of simply picking a date, Bergen says. It all has to do with your financial goals, your assets, and what you have saved up for retirement so far. This decision as to when to draw your benefits is something that should be between you and your financial advisor, Darcy Bergen says, since there are several factors involved.
For instance, if you’re still working and you are under your full retirement age, your Social Security benefits will be decreased if you make over a certain threshold. This changes year to year, Bergen says, so it’s important to be aware. It may also affect the amount you pay in taxes since more of your Social Security money would be taxed. However, if you wait until full retirement age, you won’t incur either of these penalties, he adds.
If you’re married, that throws another wrench into the equation, Darcy Bergen says. Since your spouse will have a different full-retirement age than you, proper planning will allow you the maximum benefit for both you and your spouse. “And if your spouse is deceased,” Darcy Bergen says, “then all these changes since none of the above applies. A good place to start your research is the Social Security site itself.* My best advice is to start planning early, no matter your situation,” he says.
Darcy Bergen is the owner of Bergen Financial Group and has over 20 years of experience as a financial advisor. During the two decades as a financial advisor, Darcy Bergen has advised his clients on retirement and other business concerns. Aside from working with his clients, Darcy Bergen enjoys teaching young Americans how to make the most out of their finances. Darcy Bergen mentions young Americans have many misconceptions when it comes to Social Security benefits. He explains what young Americans need to know about Social Security Benefits in 2020.
Young Americans Will Have Access to Social Security Benefits When They Retire
The main question young Americans ask about these benefits is, “will Social Security benefits be around when I retire?” As a financial advisor, Darcy Bergen gets many questions from his customers regarding social security benefits. For many years, Americans have heard a rumor that Social Security pays more money than what it brings in. There have been financial predictions that mention Social Security will entirely run out by 2037. Although most people who worry about Social Security benefits are those who are approaching retirement age, Darcy believes young Americans should stay current on the latest news.
Why do people presume that Social Security benefits will run out by the year 2037? The reason behind this prediction is simple, for starters, the population lives longer, and birth rates are low. While people might continuously contribute to Social Security longer, not as many beneficiaries are born. However, as long as those contributions continue, there will be enough money in 2037 to pay beneficiaries of at least $760 a month.
Social Security Will Not Be Enough Retirement Income
The Social Security Administration states that currently, 50 million Americans receive these benefits totaling $614 billion annually*. According to Darcy Bergen, not many young people know what the role of Social Security will play in their retirement. Even if $614 billion seems like a large quantity, it comes out $12,000 a year per person. It isn’t very easy for Americans to make ends meet with an annual Social Security income of $12k. While this amount is not enough, over two-thirds of the elderly population relies on Social Security to provide over half of their income.
As someone who has been offering financial advice for the better part of twenty years, Darcy Bergen wants young Americans to know they should not rely on Social Security as their income. It’s also important to keep in mind that many people need Social Security benefits before retirement. On average, 3 out of 10 people will become disabled before retirement age and need to collect Social Security before retirement. Because so many people will rely on Social Security benefits if they become incapacitated, this is not a reliable source of income.
For more of Darcy Bergen’s tips on Social Security and retirement benefits, check out darcybergen.co.
Darcy Bergen has over 20 years of experience as a financial advisor helping his clients with their financial needs, such as planning for retirement. After all of those years of experience, Darcy Bergen has seen many young adults putting off planning for retirement. Many people in their 40s and 50s have retirement in mind, but many young people fail to start thinking about it in their 20s when they join the workforce. Darcy Bergen shares vital points to keep in mind when planning for retirement early on in life.
It’s Never Too Late to Make Retirement a Priority
It cannot be very easy for young adults to make retirement a priority when they have more pressing needs to take care of. They don’t prioritize their retirement savings because they believe they have more time to start saving. Who wants to think about saving for something that will happen 40 years from now when they have large bills now? Darcy Bergen believes all young adults will make a significant impact on their retirement savings if they make them a part of their monthly expenses. Any amount they put away will make a difference.
Take Retirement Benefits into Account When Applying for a Job
When young adults are in the process of entering the workforce after college, they often take jobs that will pay the bills and will build their resume. The last thing on their minds is the 401(k) plan because they think they will have more time once their careers have been established. Taking this approach could be beneficial to make them better candidates for more opportunities in the future, but it won’t help them save for retirement. Darcy Bergen advises against taking jobs that don’t have a 401(k) plan to offer their employees. If possible, he recommends only applying for jobs that offer retirement benefits.
Enrolling in Employer Offered 401(k) Plans
Many young Americans don’t take advantage of the plans offered by their employers. Only 25% of working young adults use the retirement savings plans offered by their employers. The employer-provided 401(k) plans are an excellent way for people in their 20s to start saving for retirement. Another advantage is that many employers match the contributions of their employees. Darcy Bergen mentions not taking advantage of these retirement plans could be a big mistake in the long run.
For more information and tips on saving for retirement and other financial benefits, check out darcybergen.co
Financial planner, Darcy Bergen has over 20 years of experience helping clients plan for retirement. He is the owner of Bergen Financial Group and has helped clients with their investment, Social Security Benefits, Fixed Index Annuities, retirement planning, and other financial needs. Research shows that only 70 percent of Americans are ready for retirement. For the 30 percent who aren’t, Darcy Bergen shares questions everyone should ask themselves to prepare for retirement.
What are Your Sources of Income During Retirement?
Although planning for retirement should start in their 20s or 30s, many people put it off until they’re approaching retirement age. For those individuals approaching retirement age, Darcy Bergen recommends they take a look at what their sources of income will be once they transition into retirement. Some people will rely on their tax-advantage retirement accounts such as 401(k) or IRAs, while others will mostly rely on their Social Security income. Even with those sources of income, it might not be enough for retirement. Darcy Bergen recommends people start planning early and try to diversify their income by starting a business or investing in rental properties.
Do You Have the Income to Pay for Healthcare Expenses?
Once they reach the age of 65, people can start collecting Medicare to cover their medical expenses. However, their healthcare-related costs are likely to increase over time. Medicare only covers about 50% of medical expenses, and they will still be responsible for co-pays and other out of pocket expenses. Darcy Bergen suggests retirees look into supplemental health insurance, such as contributing to a Health Savings Account (HSA). HAS accounts offer flexibility, are tax-free, and will help cover medical expenses not covered by Medicare.
Do You Have a Solid Retirement Account?
After 20 years in the industry, Darcy Bergen has encountered many clients who don’t know how much they actually have saved in their retirement accounts. Staying on top of their retirement accounts will help simplify the process of them in the long run. Darcy advises people approaching retirement age to meet with a retirement planning advisor to review their current accounts and come up with a plan.
How Do You Plan on Spending Your Retirement?
Deciding how they want to spend their retirement is an important step that many people overlook. Do they plan to downsize their home? Do they wish to travel? The answers to these questions will help shape their retirement plan.
Financial advisors like Darcy Bergen help clients answer these and other tough questions to ensure their clients have the life they deserve once they retire. For more of Darcy Bergen’s financial tips on retirement, check out darcybergen.co.
Darcy Bergen is the owner of Bergen Financial Group and has experience working with clients who have various financial concerns. He has over 20 years of experience helping clients with their financial planning needs from IRAs, Social Security benefits, and Fixed Index Annuities. Darcy Bergen says the key to a happy retirement is to start planning early. However, only about 71 percent of Americans are financially prepared for retirement, and the other 29 percent have trouble with budgeting and living a comfortable retirement. Darcy Bergen shares tips for those who want to learn how to budget for retirement.
While having a nice big house with a yard is great, retirees can accrue a lot of expenses while trying to maintain the house. Darcy Bergen recommends those who want to live more frugally during retirement, should give their housing situation a bit more consideration. Retirees who want to live on a budget consider moving somewhere where the cost of living is more affordable, downsizing or find ways to get rental income. In the long run, even yard maintenance can add up and become a burden on the fixed income of a retiree. Moving to a smaller house or a condo is something many retirees should consider.
Treating Their Retirement Accounts Like a Paycheck
One of the best things retirees can do is manage their retirement funds like a paycheck. Darcy Bergen mentions it’s a good idea to set up automatic withdrawals from their accounts. During retirement, it’s tempting to know that they have access to a large pool of money; however, those funds are not unlimited. Setting up money transfers from their accounts on a weekly or bi-weekly is called a systematic withdrawal. Talking to a financial advisor will ensure they make the withdrawal process more convenient.
Healthcare Should Be a Priority
During retirement, it’s more important than ever for senior citizens to stay healthy. The average retiree spends $4,300 on out-of-pocket healthcare expenses. Although it’s impossible to predict the health of a person, there are preventative measures retirees can take to stay healthy. Exercising regularly and eating home-cooked hearty meals, for example, can help them save a lot of money down the line. Senior citizens can prevent many conditions that can lead to health complications such as high cholesterol, only by eating right.
For more of Darcy Bergen’s retirement tips and other concerns, check out darcybergen.co.
Darcy Bergen is the owner of Bergen Financial Group and has over 20 years of experience helping clients with their financial planning needs from IRAs, Social Security benefits, and Fixed Index Annuities. Darcy Bergen believes a healthy financial life starts early on, which is why he shares tips for parents.
Teach them from an Early Age that Items Cost Money
Darcy Bergen stresses the importance of teaching children from an early age that things cost money. To teach children about the value of things, parents should allow their children to pay for toys at the store every once in a while. If children have a piggy bank or get money for their birthdays, teaching them they can exchange cash for toys will give them a sense of the value of money.
Teach Them to Save
Children absorb a lot of information from an early age, so it’s essential to teach them how to save. When children are young, show them how to put money in a jar or piggy bank. For example, if they want to buy a more expensive toy, put the name of the toy in the jar and start putting money in there. Whenever they clean their room or complete a chore, parents can give them a little money for their jars.
Lead By Example
Even if parents don’t realize it, their children pay attention to everything they do. If children hear their parents talking negatively or stressing about money, they will grow up with that stigma. Instead of complaining about money or having bad habits, teach children to have a healthy relationship with finances from an early age.
Help Children Earn Their Allowance
Rather than giving them an allowance simply because they ask for, Darcy Bergen recommends parents should teach their children to earn their allowance. If they do their chores and keep their room clean, then they will be entitled to their allowance. However, if they fail to complete their chores, then parents can deduct money from their allowance. Showing them, they have to earn their allowance will help them financial responsibility.
Don’t Teach Them About Impulse Purchases
Darcy Bergen recommends parents avoid teaching their children about impulse purchases. If their children want an expensive toy, it’s best to tell them to wait for Christmas or their birthday. If parents start buying everything their children want when they ask for it, they will set a poor financial example.
For more of Darcy Bergen’s financial tips and other concerns, check out darcybergen.co.
Darcy Bergen has over 20 years of experience helping clients with their financial planning needs from IRAs, Social Security benefits, and Fixed Index Annuities. Darcy Bergen is also the owner of Bergen Financial Group and has experience working with clients who have various financial concerns. Only about 71 percent of Americans are financially prepared for retirement, and the other 29 percent have to figure out how to make ends meet. Darcy Bergen shares tips for living on a budget during retirement.
Give Yourself a Paycheck
While it might be tempting during retirement to know that you have access to a large pool of money, those funds are not unlimited. According to Darcy Bergen, the best way to stick to a budget during retirement is by setting up a retirement paycheck. Instead of having full access to their retirement accounts, retirees should set up automatic withdrawals from their accounts. They can choose to have money automatically transferred from their accounts on a weekly or bi-weekly basis to have more control over their budgets. Darcy Bergen mentions the name of this process is a systematic withdrawal, and they can ask their financial advisors for more information.
Housing and Accommodations
Those who want to live more frugally during retirement should give their housing situation a bit more consideration. While having a nice big house with a yard is great, retirees can accrue a lot of expenses while trying to maintain their house. Even yard maintenance work can add up in the long-run. Darcy Bergen recommends retirees who want to live on a budget consider moving somewhere where the cost of living is more affordable, downsizing, or find ways to get rental income. Many retirees also give up the big house and choose to move into a smaller condo.
The average retiree spends $4,300 on out-of-pocket healthcare expenses. While there’s no way of predicting what their health will be down the line, retirees can save additional dollars by making an effort to stay healthy. Many retirees can prevent many conditions such as high cholesterol and even diabetes by eating right and staying healthy. Eating home-cooked hearty meals and exercising will help them save a few bucks on medical bills.
Take Advantage of Senior Discounts
For those seniors who want to make the most out of retirement on a budget, the best way is to take advantage of the many discounts available to them. Saving money by taking advantage of discounted movie tickets, deals while eating out, or senior days at the grocery store can help them make the most out of retirement.
For more of Darcy Bergen’s retirement tips and other concerns, check out darcybergen.co.