Black Swan Events and Retirement Planning

Prior to co-founding the innovative retirement planning firm, Income Lab, Johnny Poulsen held executive sales positions for the annuities brokerage firm Jackson National Life Distributors with offices in Denver, CO, and Nashville, TN. In his role as Income Lab CEO, Johnny Poulsen develops data-backed models to create sophisticated retirement financial plans that accurately consider the impact of financial downturns and black swan events.

In economic terms, black swan events are catastrophic, initially unpredictable circumstances that negatively impact the financial markets. In reaction to a black swan event, the U.S stock market can decline significantly within a short-time period. While these drops may worry retirees who have invested a portion of their nest egg in the market, savvy financial advisors know that historically these concerns are unfounded.

Firstly, individuals nearing retirement should already have an investment portfolio that skews conservative, which means a higher percentage is invested in more stable bonds and Certificates of Deposit. Additionally, retirement planning focuses on long-term gains, which are generally not impacted by black swan events. Experts also suggest that retirees diversify their income streams to include more reliable sources, such as Social Security or annuities so that they are better able to weather market downturns.