Recession Survival Guide

Your Best Recession Yet?

3 Hidden Opportunities & 2 Costly Mistakes

Is a 2023 recession likely?

Inflation is high, and interest rates are rising. If you’re worried, you’re not alone — even the World Bank has expressed concern that a 2023 recession is on the way.1

Worried about losing money when stocks drop? Nervous you’ll have to sell your investments at a loss?

Having nightmares about pushing back retirement? Your stock portfolio is likely to drop when the market does, and it’s never clear how long a downturn will last.

You may already be planning to spend less and cut back on travel when the recession hits. But you’re looking for specific steps to take to make sure you avoid doomsday scenarios. No matter your history with recessions, you can benefit from using the secrets of the ultra-wealthy to make money during a chaotic economy, just as they do.

Whether you’re not sure what the definition of recession really is or you’re positive we’re in one, the storm clouds of recessions hide silver linings. You just have to know where to look. Once you get your hands on a good survival strategy, you’ll be ready to potentially make money instead of losing it — even when others around you get lost in panic and anxiety.

This recession survival guide is designed for hard-working Americans — just like you — who want to know not only how to avoid losing too much money when stocks drop, but how to take advantage of it.

You may be asking yourself questions like:

If there’s a recession, how much money do I have at stake in the market?

Am I comfortable with my current investments, even when my portfolio drops?

What are the risks I’m taking with my funds?

Is there a way I can capitalize on a recession?

Do I have a financial professional I can collaborate with to capture opportunities I don’t know about?

If any of these resonate with you, keep reading…

Recession Opportunity #1

The Inflation Monster

Prices have risen substantially from April 2021, when inflation suddenly jumped from 2.6% to 4.2%, and didn’t dip below 7.5% in 2022.2 It’s hard to believe a rise in prices can be a money-making opportunity. And yet…

If you shift your focus away from stocks during this time and consider different kinds of assets you might not have considered while the bull market was roaring, you can tame the inflation beast. By adding investments that traditionally perform well when prices rise, you further diversify your portfolio.

You also capture some benefits of inflation elsewhere in your financial life.

Social Security increases by 8.7% in 2023.3

Tax brackets expand for 2023 so you pay the same tax rate on higher income levels.4

Stuff more into your retirement accounts with higher contribution limits in 2023.5

Vital questions to ask include:

Do I have investments already in my portfolio that do well in inflationary periods?

How can I take advantage of the inflationary increases in tax brackets and Social Security?

Are there assets I’ve wanted to buy that didn’t make sense when the stock market was higher?

Am I in touch with a financial professional who can advise me on making my money more inflation-friendly?

Recession Opportunity #2

Rising Along With Interest Rates

Since 1981, the Federal Reserve has dictated a consistent decline in effective interest rates, from 15% all the way down to nearly zero in 2020.6 Given that most of us really don’t know what high interest rates look like, rising ones might seem even scarier than rising inflation.

While there certainly are downsides to rising rates, you can still take advantage of them (just as you can with inflation). Again, you’ll need to look away from the stock market.

Bonds are more attractive when interest rates are rising and, as you get closer to your goal of retirement, you’ll need more money protected from stock exposure (though you’ll almost always need some stocks in your portfolio).

Annuities may also benefit from increased interest rates.

Vital questions to ask include:

Is my balance between stocks and bonds right for my personal circumstances right now?

Do I have fixed income in the right places in my accounts (retirement and non-retirement)?

Am I invested in the right fixed income instruments?

Do I have a financial professional who can advise me on the right assets in the right places?

Recession Opportunity #3

Tax Strategies That Won’t Bite You

Taxes may be inevitable, but you don’t have to overpay them either (if you know what you’re doing). When prices drop, you have the opportunity for some legal ways to make your taxes work for you in a recession.

Use Roth conversions and “backdoor Roth” techniques: 2023 could be a great year for converting traditional, pre-tax money to after-tax money that’s tax-free on withdrawal (as long as you follow the rules).

“Fill up” increased tax brackets: With more room in your tax bracket, you could do more Roth conversions or consider taking more capital gains since this could be the last year you’re in a lower bracket.

Harvest your tax losses: Offset capital gains with tax losses and you may be able to create enough to carry forward into future tax years.

Vital questions to ask include:

Do I have a tax planning strategy for all seasons?

Have I considered whether converting some pre-tax money makes sense this year?

Where does my income fall in my current tax bracket, and should I take up the whole bracket?

Do I have a financial professional who’s knowledgeable about recession tax opportunities?

Recession mistake #1

Waiting Too Long to Take Advantage

With these strategies, you have an opportunity not only to limit portfolio losses in a recession, but also to potentially profit from the downturn. Deciding that there are no moves to make is a mistake. You may not be able to take advantage of all the opportunities available, but there’s probably at least one that you could capture when the market drops.

Some of these strategies are only available through the end of the year in 2023, so you’ll need to plan ahead of time and make sure you’re securing the ones that make sense for you. By putting the right techniques in place before they’re gone, you’ll position yourself well for the duration of the recession.

Vital questions to ask include:

Is my portfolio well-balanced between risk and return, so I don’t lose out when the recession’s over?

Which strategies will work for me, and when do they expire?

How can I put my 2023 recession strategies in place?

Do I have a financial professional who can guide me on building out my plan?

Recession mistake #2

Trying to handle the recession by yourself

When recessions do arrive, they’re accompanied by chaos and it’s hard to stay level headed. It’s not always clear when a recession is actually here, since a stock drop could be just a temporary pullback that gives stocks some breathing room.

There’s a lot of noise, from the media, friends and colleagues, and probably people that you meet on the street. It’s hard to identify the alarm bells, and it’s hard to do by yourself surrounded by conflicting advice.

Wealthy investors almost always have advisors that they consult with before making strategic financial decisions, and it’s a smart move for you to do the same thing. The wealthy know what they don’t know, so they look to professionals to help them craft a plan that allows for healthy portfolios in both bull and bear markets.

Vital questions to ask include:

Am I confident that I can maintain my plan when markets change?

Is my current plan the right one for a 2023 recession?

Do I have a plan for separating real warning signs from noise?

Is my financial professional knowledgeable in both recessions and my personal circumstances?

Hearing Alarm Bells? Survive and Profit in 2023

The thought of a recession can be worrisome (even when it’s not really clear if the recession is actually happening). Downturns in the stock market may lead to losses in the value of your portfolio and push back your retirement date.

But with the right techniques in place, you can not only survive a recession, but thrive. While some of the indicators of a recession such as high inflation and rising interest rates are here, you can still take advantage of the opportunities hiding behind the noise and fear.

While there are benefits that you can capture during a recession, you need to have your strategy ready as early as possible to seize those opportunities. Some of the advantages expire by the end of the year, so you can’t wait until tax season. And others may unexpectedly appear and you need to position yourself to grab them before they get away.

You also want to make sure that your approach to the recession doesn’t interfere with potential returns when a recession disappears — or even doesn’t officially appear. Our team has the knowledge and experience to tailor your plan to your unique circumstances, so contact us today for your FREE, customized 1-on-1 Recession Survival Session.

It’s critical to make sure that your tax planning doesn’t come back to bite you at the end of the year, so it has to work hand-in-hand with the rest of your portfolio strategy. Use the same techniques as the wealthy do, including consulting with financial professionals who can help you craft your money management so you potentially limit your losses — but not your profitability — in 2023. Call us now to set up your 1-on-1 Recession Survival Session for free.


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Risk Disclosure: Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance does not guarantee future results.

This material is for information purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. The content is developed from sources believed to be providing accurate information; no warranty, expressed or implied, is made regarding accuracy, adequacy, completeness, legality, reliability, or usefulness of any information. Consult your financial professional before making any investment decision. For illustrative use only.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.