Financial advisor Darcy Bergen possesses more than two decades of experience in financial planning. Darcy Bergen has also appeared on several media outlets to inform the public on retirement options, including viable alternatives to annuity products.
While fixed index annuities are reliable retirement savings vehicles, some clients may prefer alternative low-risk assets or wish to diversify their portfolio with similar options. Some alternatives to annuities include:
- Managed payout funds (MPFs). While both annuities and MPFs offer a predictable income, MPFs have lower fees and more liquidity since shares can be sold at any time. Unlike annuities, many MPFs have minimum yields that keep pace with inflation.
- Laddered bonds. In this strategy, clients purchase bonds with sequential maturity dates and reinvest the proceeds into new bonds. Bondholders receive steady returns and have the option to sell bonds on lower rungs of the ladder for liquidity.
- Variable life insurance. Though this strategy is not a savings vehicle, it is another option for retirees who want the stability of an annuity. In addition to a death benefit, variable life insurance policies have a cash value that can be invested.
The longtime managing partner of Bergen Financial Group, Darcy Bergen focuses on key retirement planning areas, including social security and risk management. Darcy Bergen organizes several financial workshops for seniors that discuss important insurance products, such as universal life policies.
Universal life insurance premiums go toward a death benefit, similar to a term-life policy, and investments. If a policy is purchased early in life, the investments may grow large enough to cover the premium costs, making the policy self-sustaining. The invested portion can be cashed out at any time and used for large purchases, such as college tuition or a house.
There are two different models for universal life policies. Traditional plans offer a guaranteed minimum interest rate that can rise depending on the performance of the economy.
Meanwhile, indexed plans are exposed to derivative market products. In a high-performing market, an indexed policy may pay out a high-interest rate, which usually ranges between 10 percent and 12 percent.
Experienced financial advisor Darcy Bergen specializes in retirement planning and risk management. As the president of Bergen Financial Group, Darcy Bergen advises clients who are undergoing major lifestyle changes, such as retirement and downsizing.
Downsizing is a good option for retirees looking to simplify their lifestyle and reduce their financial liabilities. Buying a smaller home in a planned community can also remove maintenance responsibilities, which can bring peace of mind to older homeowners. In certain situations, downsizing can leave homeowners mortgage-free with more money to invest.
However, downsizing doesn’t always mean a smaller space or a less expensive home. For example, people who want to retire in the city center may pay more for a smaller space that comes with more convenience and less maintenance. Additionally, some retirees may move to a more expensive area to be closer to other family members or to live in a warmer climate.
Before downsizing, homeowners should work closely with a financial advisor to determine the advantages. In some cases, rather than downsizing right away, homeowners may be better off paying a high mortgage for a few years and selling in a better market. Moving costs, realtor fees, and other expenses should also be considered.
A fiduciary with a Series 65 license, Darcy Bergen serves as the founder and a managing partner of Bergen Financial Group. Possessing extensive experience with risk management, income planning, and social security planning, Darcy Bergen assists clients with a wide variety of financial planning needs.
As the baby boomer generation reaches retirement age, many are facing the prospect of rising long-term care costs. The median cost of long-term care support services rose about three percent from 2017 to 2018, which exceeded the U.S. inflation rate, according to Genworth’s 15th Annual Cost of Care Survey. For example, the annual median cost for a home health aide is $50,336, while an assisted living facility costs approximately $48,000 per year, and a semi-private room in a nursing home costs nearly $90,000 per year.
In order to afford the expense of long-term health care, many retirees are looking into hybrid whole life, hybrid indexed universal life (IUL), and hybrid annuities as alternatives to stand-along long-term care policies. Hybrid policies are less restrictive and don’t usually have a “use it or lose it” approach to benefits. In fact, some hybrid policies offer a death benefit if the policyholder does not use the long-term care benefits.
Possessing more than 20 years of experience in the financial services industry, Darcy Bergen serves as founder and president of Bergen Financial Group in Peoria, Arizona. Holding a certified retirement financial advisor credential, Darcy Bergen shares his knowledge with a large audience through hosting a live radio show called "Smart Money" and the television show "The Money Doctors.”
As you near retirement age, a financial advisor can help you navigate complex tax laws to make sure you get the most from your money. For instance, once you turn 70.5 years old, you must begin taking required minimum distributions (RMDs) from your retirement account. Once you start withdrawing those tax-deferred funds, you may land in a higher-income tax bracket with a higher percentage of earnings going toward taxes. Consulting a financial planner can help you complete careful tax planning to compensate for the impact of RMDs on your taxable earnings.
Insurance coverage is another financial planning topic to seek professional advice about, once you reach retirement age. Purchasing permanent insurance or annuity policies can help you and your family plan for long-term care expenses, as well as supplement retirement income and provide funds for spousal survivorship.