The possibility of a recession is a big worry when you’re planning for retirement. Today’s market is full of storm clouds, and professionals are warning that a big recession is about to hit America. If you’re in retirement or nearing retirement, what are some ways that you can put yourself in a better position to weather the market changes on the way?

This year, the stock market is already down over 20%, and it’s still got a lot further to fall. You might be looking at your accounting right now and getting worried because you’ve already lost money and you see a recession on the horizon. Maybe you’re looking into hiring a financial advisor, but you’re not sure exactly who to trust or what it would look like to let someone else step into your financial situation. Let me explain what the process is like when somebody comes and asks me for help.

The first thing that’s going to happen, if you move your money to me, is that I’m going to immediately add 12% to your account balance. Whatever amount you choose to let me handle, I’m going to give you 12% of that. If you started this year with $500,000, you would now be down to $400,000 because the market fell 20%. If you move your money to me, I’m going to take 12% of that $400,000 and give it to you. That doesn’t quite make up the 20% that you lost, but it is $48,000 that you didn’t have before. Right away, you’ll have made up almost half your losses!

Another thing that I can give you right away is the guarantee that you will not lose money over the next ten years. If the market goes down, we swallow the loss for you, and you lose nothing. If the market goes up, you get a chunk of the upside. You have some potential for growth and an absolute guarantee against loss for ten years.

At this point, you’re probably starting to get suspicious; this all sounds too good to be true, so where’s the catch? There is no catch—but there is a condition. The condition is that you must commit to the investment for all ten years. It’s still your money, and you’ll have access to most of it, but what you can withdraw is limited to 10% of your total account value per year. By taking out the full 10% every year for ten years, you can take out almost your full investment, but only by doing so slowly over the full ten years. If you take out more than 10%, you will have to pay a penalty. My goal is to make your money grow, and yours is to give up some liquidity and agree not to touch that money beyond a certain amount each year.

You might also be concerned about putting all your money in one place. A common rule in investments is that you never put all your eggs into one basket. A lot of people planning for retirement like to subdivide their retirement accounts and use some of it for riskier investments and hold the rest back to be safe. This plan that I’m discussing is a plan for the safe side of your investments. What this strategy is offering is 12% guaranteed upfront, plus the security of knowing that for ten years, you won’t lose a thing no matter how much the market goes down. If the market goes up, you’ll get some of the upside, but the priority for this account is slower growth and absolute security. In this portfolio, there’s also a fixed account option where it will pay 2.5% interest; you’re guaranteed to make 14.5% of whatever you invest in your first year. After that, the focus is on protecting what you have and growing in increments.

The official name for the bargain I just described is a fixed index annuity that has an upfront bonus and is being offered by an A-rated company. If you’re just hearing about this now, you may be wondering why no one has brought it to your attention before. Where have these solutions been while you’ve been struggling to plan for retirement?

Those questions are why Centennial Advisors exists. We believe that retirement should be the best time of your life. You should be able to focus on doing what you love without worrying about your portfolio, if you’re going to run out of money, or if there are ways of protecting your retirement that you just don’t know about.

Past performance is not indicative of future results. The material above has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed, and Centennial Advisors, LLC makes no representation or warranty as to the accuracy or completeness of the information, which should not be used as the basis of any investment decision. Information contained on third party websites that Centennial Advisors, LLC may link to are not reviewed in their entirety for accuracy and Centennial Advisors, LLC assumes no liability for the information contained on these websites. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Centennial Advisors, LLC. For more information about Centennial Advisors, LLC, including our Form ADV brochures, please visit https://adviserinfo.sec.govor contact us at 512.265.5000.

Past performance is no guarantee of future results. Guarantees are subject to the claims-paying ability of the issuing insurance company.

1. Vesting schedule: The schedule setting forth when a benefit is earned (e.g., 20% per year over 5 years).
2. Surrender charge period: Period of time in which a charge will be levied on an annuity upon cancellation (e.g., 7% 1-3 years, 5% 4-5 years, 1% 6-10 years).
3. Point-to-Point refers to a method for determining the change in the relevant index. This impacts the calculation of the amount of interest to be credited to the contract based on the change in the index. Annual point-to-point compares the change in the index at two discrete points in time – in this case the change from the 1st day of a given calendar year to the 1st day of the subsequent calendar year. Refer to the chart for a detailed example.
4. The conservative and variable investments could lose money, and the total ending balance of this type of investment strategy could be less than an indexed annuity’s total ending balance.