Darcy Bergen of Bergen Financial Group discusses 401k pros and cons with members and prospective investors. He wants such people to know exactly what they’re getting into if they choose to save for retirement that way.
Darcy Bergen wants prospective 401k account holders to know that there are ups and downs of signing up for traditional 401k accounts. These are some of the pros and cons he talks about.
The Pros of a 401k According to Darcy Bergen
Massive Tax Reductions
Darcy Bergen wants consumers to know that a traditional 401k plan can benefit them greatly during tax season. Their contributions come out of their paychecks before taxes, and that removes them from the part of the income that the IRS can tax. Theoretically, the contributions can put the members into a different tax bracket, which can qualify them for other credits and deductions.
Free Money From the Employer
Darcy Bergen says that one of the most favorable aspects of starting a 401k account is that many employers offer matching contributions. As long as employees keep contributing to their accounts, the employers will continue to match the contributions. Bergen says that the process is like receiving free money, and no one would be unhappy with that.
Darcy Bergen points out the low-interest loans as being another positive aspect of 401k account ownership. Some 401k plans permit participants to borrow from the plan. Generally, if permitted by your plan, you may borrow up to 50% of your vested account balance up to a maximum of $50,000. The loan must be repaid within 5 years, unless the loan is used to buy your main home.*
The Cons of a 401k According to Darcy Bergen
Caps on Contributions
Darcy Bergen warns that the government places a cap on the contribution amounts for 401k accounts. Accountholders will only be allowed to contribute $19,500 as of the year 2020, though employer contributions do not count toward this cap. Employees may be able to add up to $6,500 to that if they are over the age of 65.
Darcy Bergen says that the whole concept of the 401k account is for a person to save money until he or she is nearing retirement age. Therefore, the IRS has many rules regarding withdrawals. An account holder may take a withdrawal from a traditional 401k account only if the emergency meets IRS guidelines. Some 401k plans may allow a hardship distribution to pay for medical expenses, funeral expenses, or tuition and related educational expenses.** Otherwise, the funds will not be released until that person reaches the age of 59 ½. Access to funds is very limited in this type of retirement account. If one would like more access to the funds, that person may want to consider opening a high-yield savings account or an alternative financial account that allows more freedom.
Limited Investment Portfolio
Darcy Bergen also mentions that investment portfolio options are usually limited when a person opens a traditional 401k. The employer usually chooses an investment firm, and thus the individual is limited to investments that may not meet his or her specific needs. There are some alternatives to opening a traditional 401k, however. Darcy Bergen can explain the alternative retirement savings options to prospects so that they can choose the one that fits their lifestyle and requirements.
Interested persons can visit bergenfinancialgroup.com for additional information about retirement accounts and the various alternatives they have when choosing the right one for themselves.
Why IRAs are Beneficial Now and Through Retirement, According to Darcy Bergen
Opening an IRA account comes with a variety of benefits. While there are different types of IRAs available, it’s important to explore why one should open one. Darcy Bergen, a financial advisor based out of Arizona, discusses the benefits and how it can lead to a more effective retirement plan.
Darcy Bergen explains that there are several different types of IRA accounts. While there are pros and cons to each, he focuses on two of the most common: traditional and ROTH. The traditional IRA is tax deductible and grows tax deferred until retirement. Contributions to the Roth IRA are not deductible however, the income in retirement is income tax free. In many instances, that is the type of IRA that he will recommend to people who are looking to plan for their retirement.
One of the most important things Darcy Bergen explains about an IRA is that it can lead to annual tax deductions. Most people will contribute to the IRA account on an annual basis. In some instances, it can lead to over $1600 in income taxes when contributing only $6,000 to an account.
Additionally, Darcy Bergen identifies that both can be a great source of retirement income. While many people will start to make withdrawals as early as 59 ½, withdrawals don’t need to be made until the age of 72. Darcy Bergen explains that leaving the money in these accounts as long as possible is usually the best because the longer the money is invested for, the more potential for earning and compounding of interest.
Many people are not aware of the many tax-deferred retirement savings that are available with an IRA account. Darcy Bergen covers these things not only in the talk show that he has with his wife but also during the consultations that he offers. He explains how an IRA can lead to a more comprehensive retirement plan above and beyond what someone may have with a 401k account.
Darcy Bergen will discuss how using an IRA in connection with a 401k can multiply retirement savings. Then, by waiting until the age of 65 to retire, it can lead to more money being available. A well managed IRA can be a key component of a comfortable retirement. Darcy Bergen has found throughout his years of financial planning that many people don’t have IRA accounts or don’t understand the full benefits.
Darcy Bergen recommends that everyone take the time to sit down and discuss a comprehensive retirement plan. He also reminds people that retirement planning can happen at any time – and suggests that even people who are under the age of 40 begin to explore a plan.
Investment advisory and financial planning services offered through Simplicity Wealth, LLC, a Registered Investment Advisor. Sub-advisory services are provided by Advisory Alpha, LLC, a Registered Investment Advisor. Insurance, Consulting and Education services offered through Bergen Financial Group. Bergen Financial Group is a separate and unaffiliated entity from Simplicity Wealth and Advisory Alpha.
When people are dealing with their day-to-day lives it is difficult to think forward. Darcy Bergen explains how to prepare for retirement.
Right now when we are smack dab in the middle of a pandemic, the last thing you may be thinking about is how to plan for your retirement. After all, some of us are trying to plan for how to eat or where to get toilet paper! But for millennials, it is still important to think about the future. Despite the common belief, millennials are actually fairly industrious; they have a strong work ethic and are notably idealistic. But everyone needs help, and Darcy Bergen has some advice to help this generation have a leg up going into retirement.
Helpful Tips for Millennials from Darcy Bergen on Planning for Retirement
Now, a lot of these tips are not likely going to be something you will be taking advantage of today. If you can afford to do so, more power to you, but as Darcy Bergen points out, a lot of millennials are getting hit fairly hard by the pandemic financially. Nevertheless, these are the tips to consider when you are able to do so.
Firstly, the simplest thing you can do is to squirrel away money. As tempting as it may be to buy luxury items, putting a percentage of your paycheck into a retirement fund will make a world of difference down the road. On the same note, Darcy Bergen recommends that you deal with your debts now before they begin to get any more out of control than they already are. Once you have reduced or eliminated your debts, you can both begin to put more into your retirement fund as well as treat yourself to more luxuries without feeling bad.
People, and not just millennials, tend to eat out a little too much. This certainly adds up, and a much cheaper option is to learn to cook and buy the ingredients yourself. In fact, a lot of things, Darcy Bergen explains, can be accomplished through a do-it-yourself attitude. Learn how to maintain things around your house? Don’t have to pay maintenance people as often. Need a hobby that does not cost a lot of money to get into? Try learning to draw. There are a number of things you can do to reduce the amount of money you spend on things while giving you more money to put into your retirement. On top of that, you will come out of it feeling more capable and accomplished, Darcy Bergen points out.
One thing Darcy Bergen thinks people should consider more often is therapy. There are some people who, when they are depressed or mentally unwell, turn to ‘shopping therapy,’ where they purchase things they do not need just to buy it. Dealing with this can be difficult, but in doing so, you will feel less of a pull to buy if you struggle with this, Darcy Bergen explains.
If you haven’t kept up with the changes in Social Security over the years and you’re nearing retirement age, you’re going to want to learn all you can about what you’re entitled to upon retiring. Following are some tips Darcy Bergen talks about that you need to know in order to make the right decision for you and your family regarding your Social Security benefits.
Be Sure to Max Out Your Lifetime Credits
As of this writing, Darcy Bergen says Social Security requires you to have 40-lifetime work credits to qualify for benefits. You can earn a maximum of four per year, and the benefits are based on your income for the year. In 2020, for example, one-lifetime work credit would come from $1,410 of earned income, so a full year’s worth of credits would be $1,410 x 4 = $5,640.
Also, because your benefits are computed from your past 35 highest-earnings years, if you haven’t worked the full 35 years, some of those years will be counted as zero, so be sure you have to earn for each of those 35 years. If you continue working past 35 years, the earlier years (with the lower pay) will be thrown out and replaced by the new years with higher earnings. This can result in higher benefits to you.
You Can Change Your Mind Says Darcy Bergen
Darcy Bergen says if you start drawing Social Security and later change your mind, all is not lost. There are provisions, he says, for starting over. Unfortunately, it does require you to return all your benefits, and there are some general hoops to jump through, but it is possible.
Spousal and Survivor Benefits Stop Growing at FRA
There’s no need to wait to take spousal or survivor benefits after full retirement age. Darcy Bergen says it won’t grow anymore like it would if it were based on your own benefits.
Don’t Lose Benefits Because You’re Still Working
Darcy Bergen says you can start drawing your social security benefits as early as age 62, however, your benefits will be reduced $1.00 for every $2.00 you earn over a certain “threshold” of $18,240 ($1,520 a month) that Social Security allows. Once you hit your full retirement age, this threshold disappears, and you can work without fear of losing your benefits. Darcy Bergen explains an added benefit is that any benefits that were withheld are added back in to compute your new benefits after reaching retirement age.
More Ways to Raise Your Benefits
Maxing out your quarters as we mentioned above, Darcy Bergen says, is a great way to increase your benefits, but if you have the ability to not draw benefits at your full retirement age, you’ll tack on additional income to your check for every month you delay receiving benefits, up to age 70 – which could result in an increase of about 32% in your monthly checks.
How to Keep Uncle Sam from Taxing Your Benefits
Darcy Bergen says as of this writing, Social Security benefits aren’t taxed in 37 states. If you move to one of these states, you won’t pay tax on it. However, Darcy Bergen says all state tax regulations differ according to state, and Social Security is always taxed at the federal level, so check with your financial advisor for exact computation.
You Can Benefit from Your Ex-Spouse’s Earnings
If you were married at least 10 years, you can benefit from your ex-spouse’s lifetime earnings without taking anything away from your spouse, Bergen says, even if he or she has remarried. There are certain provisions to this rule, so be sure to check to make sure you qualify.
As the owner of Bergen Financial Group, 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 specializes in providing clients with various financial products. For those individuals looking for a financial advisor, Darcy Bergen offers some tips to find the best one.
Learn About the Different Types of Financial Advisors
Darcy Bergen shares that not all financial advisors offer the same services. Therefore, those looking for a financial advisor should learn about the main types of services before making an appointment.
Retirement Income Planning Advisors: These financial advisors focus on helping clients make the most out of their retirement funds such as 40ks, Social Security, investments, pensions, and more.
Financial Planners: Most financial planners focus on general aspects of planning, such as saving goals and what type of insurance to have.
Investment Services: Investment planners focus on managing investments and setting up their clients with the ones that make sense for them.
Find a Financial Advisor with Credentials
Darcy Bergen, a financial planner with 20 years of experience, recommends those looking for an advisor to find one with reputable credentials. Some financial planners take the easy way out and don’t obtain the most distinguished credentials. Clients looking for financial advisors should ensure they have at least the following certifications: CFP (College for Professional Training), CFA (Chartered Financial Analyst Certificate), or PFS (Personal Financial Specialist).
Learn How Financial Advisors Get Paid
Many people, when they hear financial advisors immediately think only the wealthy can afford them. However, financial advisors can be affordable if clients learn how they’re compensated. Most financial advisors are fee-only, but there are others that charge hourly, asset-based, or commission.
Use Search Engines to Narrow the Search
Darcy Bergen mentions that nowadays, clients can take advantage of search engines to find the right financial advisor. When performing a search, they can specify the type of advisor and the location. Using search engines makes finding a financial advisor a more straight forward task.
Ask the Right Questions
When looking for a financial advisor, it might take time before finding the right one. It is crucial clients ask the right questions to figure out which advisor better aligns with their goals. By asking questions, clients will also learn more about how the advisor communicates. Financial advisors who take their time to answer all the questions will most likely take good care of their clients. However, if an advisor dismisses the questions, it’s usually a red flag. Please don’t make a decision solely on this factor, but consider it along with all of the other aspects.
For more financial tips and more information on a financial consultation with Darcy Bergen, check out darcybergen.co.
With over 20 years of experience as a financial advisor, Darcy Bergen is also the owner of Bergen Financial. Darcy has helped his clients through the years with their financial planning needs, such as planning from retirement, IRAs, Social Security benefits, and Fixed Index Annuities. Because healthy financial habits start early on, Darcy Bergen shares tips parents who want to teach their kids about money.
Examples to Follow
Darcy Bergen wants parents to know they have a more significant influence on the financial future of their kids than they know. Although it looks like children are not paying attention to the financial habits of their parents, they notice everything they do. When children hear their parents talking negatively or stressing about money, they will grow up with that stigma. Rather than stressing about money in front of their children, parents should help them build a healthy relationship with money from a young age.
Teach Children How to Earn Their Allowance
According to Darcy Bergen, children who earn their allowance tend to have a better relationship with money. Instead of giving children an allowance when they ask for it, parents should help them perform simple chores such as cleaning their room to earn it. It’s also a good idea for parents to deduct money from their allowance if their children don’t complete their chores. By teaching them money doesn’t come by unless they work hard, children will learn financial responsibility before reaching adulthood.
Avoid Making Impulse Purchases
When it comes to teaching financial responsibilities, making impulse purchases is a big no. Instead of buying them toys whenever they ask for them, parents should wait for a special occasion such as their birthday or Christmas. If parents start buying everything their children want when they ask for it, they will show them money comes easy.
Teach Children the Importance of Saving
Saving should start at an early age, according to Darcy Bergen. When children are young, show them how to put money in a jar or piggy bank. For example, if they want to buy the latest toy, parents should get them a piggy bank so they can save. If they perform their chores and clean their room, parents can add a little more money to their piggy banks.
As the owner of Bergen Financial Group, Darcy Bergen has over 20 years of experience helping clients with their financial planning needs from IRAs, Social Security benefits, and Fixed Index Annuities. While most people know they will receive Social Security benefits when they retire, there’s still a lot of confusion regarding these benefits. Although there are currently 61 million people receiving Social Security benefits, the rest of the American population remains unaware of all of the benefits, such as surviving spouse benefits. Darcy Bergen offers an overview of how to use the Social Security benefits of a deceased spouse.
How Can a Surviving Spouse Qualify?
The death of a spouse is a traumatic event in the life of any person. However, when the death of a spouse causes financial distress, the pain is often magnified. Surviving spouses can qualify for Social Security benefits or their deceased spouse if they can show proof the marriage lasted at least nine months. Darcy Bergen also mentions that the deceased spouse should have had also worked long enough to accumulate Social Security benefits. If they meet the qualifications, widower/widow Social Security benefits will become available.
At What Age Can Surviving Spouses Collect Social Security Benefits?
Once they turn 60 years old, surviving spouses receive their Social Security survivor benefits. Darcy Bergen mentions, surviving spouses are only eligible for 70% of the benefit at that age. To obtain the full advantage, they have to wait until they reach full retirement age. The retirement age is 66 for those born between 1945-1956. It’s expected to increase to age 67 for those born in 1962 and later. There are a few age exceptions, however, for those individuals with disabilities. Darcy Bergen mentions disabled individuals can start collecting the survivor benefit as early as age 50. Another exception is surviving spouses who care for the child of their deceased spouse who is under the age of 16, can collect the benefits at any age.
Surviving Spouse Benefits Exceptions
Social Security benefits for surviving spouses have some exemptions. If a surviving spouse remarries before turning 60 or 50 if disabled, they will lose their eligibility. Also, if the deceased spouse had any dependent children, there might be a limit on the amount disbursed per family. Darcy recommends surviving spouses keep these things in mind.
For more information on Social Security and other retirement benefits, check out darcybergen.co.
As the owner of Bergen Financial Group, Darcy Bergen has over two decades of experience serving clients with their financial needs, including planning for retirement. Although people in their 40s and 50s have retirement in mind, many young people fail to start thinking about it early on in life. Only 39% of adults start saving for retirement in their 20s, which means more than half have put off saving for retirement. Many young Americans don’t take advantage of the plans offered by their employers. 25% of working young adults use the retirement savings plans offered by their employers. Darcy Bergen shares some tips for young adults to keep in mind to start planning for retirement early.
Take Advantage of Employer Offered 401(k) Plans
While many employers offer 401(k) retirement plans for eligible employees, not many young employees take advantage of them. Perhaps many of them think they have more time to start saving for retirement Darcy Bergen mentions. Employer-offered 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. If an employee contributes $200 a month towards their retirement plan, their employers will contribute an additional $50. In a year, employees could save an additional $1,200 a year.
Not Taking a Job Without Considering the Benefits
When young adults are in the process of building their careers, they often take jobs based on how they can enhance their resume. While taking this approach could be beneficial to make them better candidates, they’re not thinking about the benefits the job has to offer. Before taking any job, young professionals should keep retirement benefits in mind. Darcy Bergen advises against taking jobs that don’t have a 401(k) plan to offer their employees. The earlier they start contributing to their retirement, the better off they will be.
Making Retirement a Priority
As briefly mentioned, many young adults don’t prioritize their retirement savings because they believe they have more time. After all, they don’t want to think about something that is 40 years away when they have student loans or credit card debt to worry about. While those expenses are essential, Darcy Bergen believes all young adults should consider saving for retirement as part of their monthly expenses. Even putting away a small amount a month can make a big difference.
For more information and tips on saving for retirement and other financial benefits, 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 as a financial planner helping his clients plan for retirement and other financial needs. Darcy Bergen often gets questions regarding the best time to buy life insurance. While there is no right answer, it all depends on the needs of the individual. Here are some reasons why you should consider life insurance in your 20s.
You Have Children
While many people in their twenties are still in college, grad school, or establishing their career, there are plenty of people in their 20s who have children. If you fall under this category, Darcy Bergen suggests you look into a life insurance policy. No parent wants to imagine leaving their child unprotected in the event of their passing. Darcy Bergen explains that parents in their 20s who take out a 20-year term life insurance plan when their child is born or a few years old will leave them with protection until they’re way in their 20s. Although many young people in their 20s think life insurance policies are costly, the younger and healthier the parent is, the more affordable policy they can get to help protect their children.
You Have Debts
If you’re in your 20s, chances are you have already accumulated a few debts along the way. On average, college students graduate with an average of $29,800 in debt. Although student loans are the most prevalent with people in their 20s, young adults also have car loans, credit card debt, and even personal loans. Those people in their 20s think they have a long time to pay off their debts; however, the unthinkable can change this. Imagine leaving behind debts, and your family has to foot the bill. Depending on the policy, someone in their 20s who is healthy could apply for a 20-year term policy with a $200,000 death benefit for more. Purchasing life insurance in our 20s can help to financially protect your family if you have a lot of debts.
You Get Married
If someone is married in their 20s or at any age, Darcy Bergen explains getting a life insurance policy can help to ensure your spouse is protected. While more people are getting married in their 30s, the average marriage age in the United States is 27.8 for women and 29.8 for men. Married couples often have many expenses together, such as mortgages, car loans, credit cards, and other debts. When a spouse passes away, there’s no way of telling what the economic impact will be on the spouse.
For more of Darcy Bergen’s financial tips on life insurance and other concerns, check out darcybergen.co.
As the owner of Bergen Financial Group, Darcy Bergen has been a financial advisor for over twenty years. Darcy Bergen advises his clients on retirement and other financial concerns. Although many of his clients are those approaching retirement age, he likes to offer advice for Americans in all stages of life. For starters, there are a lot of misconceptions regarding Social Security benefits Darcy Bergen wants Americans to be aware of.
People Can Use Social Security for More Than Retirement Benefits
Darcy Bergen explains a lot of people don’t know that they can take advantage of social security benefits for more than just retirement benefits. Social Security beneficiaries can use them as disability benefits, surviving spouses, Medicare, and benefits to the family of deceased workers.
Learn About the Payout Rules
Before people decide to take out their Social Security benefits, they should know about the payout schedule. For example, if they request their February payment, they will receive it in March. Darcy Bergen advises his clients to keep this in mind if they’re relying on the payments.
The Social Security Administration Reviews Benefits
The SSA administration performs a yearly review of all the benefits and calculates the amount beneficiaries receive as needed. The longer the beneficiary works, the more money they will receive.
Social Security Beneficiaries Can Work While Receiving Benefits
According to Darcy Bergen, many people are not aware they can receive social security benefits and keep working. Many people choose to continue working while they receive their Social Security benefits until they reach full retirement age. While they continue to receive the benefits and work, the SSA will reduce their benefits if their earnings reach the limit. For example, they could be reduced $1 for every $2 they earn. Darcy Bergen mentions once the person reaches full retirement age, they will receive the total amount even if they keep working and go over the limit.
The Benefits are Based on 35 Years of Earned Income
To calculate the Social Security benefits, the SSA uses 35 years of income as a base. Before qualifying for the benefit, people should work for a minimum of forty quarters, or ten years. If a person goes through a period when they don’t earn any income, it could throw off their average. When someone hasn’t yet hit thirty-five years of work, Darcy Bergen recommends they work for a few more years to increase their potential benefits.
Beneficiaries Will Have to Pay Taxes
Darcy Bergen mentions a lot of people are not aware they have to pay taxes on their Social Security benefits. Those who will rely on their Social Security benefits as their sole form of income should be aware of this fact.
For more of Darcy Bergen’s tips on Social Security and retirement benefits, check out darcybergen.co.