Protecting Retirement Investments from Market Corrections

In addition to leading the Bergen Financial Group for more than 15 years, financial planner Darcy Bergen shares professional investment advice through his workshops targeted to Arizona residents nearing retirement. Darcy Bergen advocates for conservative money strategies that reduce risk, including exposure to prolonged bear markets.

While it is normal for the stock market to go up and down, certain conditions can cause very large gains followed by steep declines. Since many retirement investment vehicles such as 401(k)s and mutual funds are linked with stock market performance, a deep market correction can lead to significant losses that many retirees will not be able to recover from. 

For this reason, retirement planning advisors suggest several strategies for protecting savings when the first signs of a market downturn appear. One option is to move investments to more stable vehicles such as fixed annuities and fixed index annuities. 

Paying off consumer debts and any mortgages as quickly as possible also protects a retiree’s standard of living in the case they must live off a smaller retirement pot. Other tactics include writing off losses to lower tax liabilities or converting a traditional IRA into a Roth IRA.