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Erin Arvedlund: Should you recession-proof your investments?

Erin Arvedlund, The Philadelphia Inquirer on

Published in Home and Consumer News

In the 2001 recession, which lasted only eight months, Vanguard Global Capital Cycle (formerly a gold fund) rose 28.3%, while the average fund gained 1.8%. The S&P 500 Index fell 1.0%.

Finally, during the Great Recession, Vanguard GNMA Fund, a bond fund, led the way with a 9.9% gain while the average Vanguard fund declined 22.2%. The S&P 500 Index dropped 35.0% during the same period.

SECURE Act Update

Congress has to pass a budget to keep the lights on as of Oct. 1, and it's possible that the long-awaited Senate version of the SECURE Act will be tacked on to that bill.

We wrote a detailed piece on the SECURE Act in July, calling it the most significant legislation in years affecting Americans' savings for retirement. Key provisions include:

--More time in IRAs and 401(k)s. The bill would push back the age for required minimum distributions (RMDs) from 70 1/2 to 72 years old.

 

--Grant part-time workers benefits. Long-term part-time employees would be able to participate in their company's 401(k) plans.

--Boost small-business 401(k)s. Small businesses could band together in group plans.

--529 plans. 529 plans would be expanded to pay for expenses related to an apprenticeship or to pay back as much as $10,000 in student loans.Annuities. Would allow employer-sponsored 401(k) plans to add annuities as investment options.

--Annuities are an expensive way to save for retirement, so beware of these products in your 401(k), some experts say.

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