Darcy Bergen Shares His Philosophy on Retirement Strategies in an Economic Downturn

Darcy Bergen

January 25, 2021

Darcy Bergen Shares His Thoughts on Retirement Strategies in an Economic Downturn

Darcy Bergen, a prominent financial planner, recently shared expert advice on how individuals can plan or adjust their retirement finances during a downturn. As the founder and managing partner of Bergen Financial Group, Darcy has a wealth of experience in income planning for retirement. 

He noted the impact of the Covid-19 health crisis is having on retirement planning. Hence, he decided to talk about the challenges and potential solutions to the financial situation. The current experience is creating a new dynamic for both retirees and people preparing for retirement. Darcy stated that the Covid-19 crisis highlighted the need to save earlier for retirement. 

Darcy Bergen Talks About How to Approach a Downturn

The impact of the downturn compels individuals to reassess their investment strategy. However, many people are unsure about how to approach this assessment to preserve and grow retirement savings. 

Darcy Bergen urges retirees and anyone close to retirement to reassess asset allocation. He underlines the importance of evaluating risk tolerance to prevent risky moves that threaten savings under recession conditions. By minimizing market exposure, it becomes easier to cope with market declines. 

According to Darcy, prudent portfolio management entails purchasing stocks in response to a fall. This rebalancing approach allows investors to push their portfolio back to target. Although this strategy appears counterintuitive, Darcy Bergen states that purchasing stocks low and selling high enables retirees to rebalance portfolios while reducing emotional bias.

Despite the risks, staying in the market is crucial during the downturn. By doing so, investors benefit from higher potential returns compared to yields derived from certificates of deposit (CDs), savings accounts, and other investment options. Keeping assets invested has historically been a way to counteract the effects of inflation and to avoid selling at the bottom during market volatility.

Younger investors can ride out a downturn, but retirees require the security provided by a mix of investments and assets. 

Darcy Bergen Shares Tips on Guaranteeing Retirement Income

To shield investments from the effects of the downturn, Bergen recommends opting for guaranteed income sources. These investment solutions should be immune to market volatility and allow investors to accumulate cash reserves and bolster a portfolio’s resiliency. In turn, it becomes easier to avoid losses.

Examples of stable sources of retirement income listed by Darcy Bergen include annuities, pensions, and social security. For individuals planning to retire, he recommends holding cash reserves in a savings account. These funds can help cover expenses for several years. 

Alternatively, individuals can go for cash value in permanent life insurance. This option acts as a stable cash reserve in a low performing market. By creating such a cash reserve, individuals avoid disposing investments at a loss when looking for cash supply. 

Darcy also emphasizes diversification, which keeps an investment portfolio diversification, which can mitigate some market volatility during market downturns. Some components of the portfolio may experience upswings and offset some losses. Bergen recommends incorporating multiple groupings and sectors in each asset class.