4 Best ETFs to Supercharge Your Roth IRA
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- เผยแพร่เมื่อ 10 ก.พ. 2025
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In this vide, we'll cover four types of ETFs that could be beneficial to hold within a Roth IRA, focusing on maximizing tax-free growth over time. A Roth IRA offers significant tax advantages, where investments grow and can be withdrawn tax-free during retirement. These ETFs align with long-term growth potential, making them suitable for a Roth IRA.
First, growth-focused ETFs, such as Vanguard’s Growth ETF (VUG) or Charles Schwab’s US Large-Cap Growth ETF (SCHG), invest in companies with strong growth potential, primarily in sectors like technology, healthcare, and consumer discretionary. While growth ETFs can be volatile, they offer significant upside over time, which aligns well with the long-term growth objectives of a Roth IRA.
Total stock market ETFs, like Vanguard’s Total U.S. Stock ETF (VTI), provide broad exposure to the entire U.S. stock market, including large, mid, and small-cap companies. This diversified option balances growth with some dividend income, making it a versatile choice for long-term investors looking to benefit from the overall growth of the U.S. economy.
Some types of ETFs may not be ideal for a Roth IRA, such as dividend-focused ETFs and Real Estate Investment Trust (REIT) ETFs. While these ETFs pay high dividends, they focus more on income generation rather than growth and may be better suited for traditional pre-tax retirement accounts, where income taxes can be deferred.
Lastly, S&P 500 ETFs (e.g., Vanguard’s VOO) and international ETFs (e.g., Vanguard’s VXUS) offer a mix of growth and diversification. S&P 500 ETFs track large U.S. companies, while international ETFs provide exposure to global markets, helping diversify beyond the U.S. economy.
These ETFs are designed to help optimize a Roth IRA for tax-free growth, but it's important to choose investments that fit your individual goals and risk tolerance.
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Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money.
I wish they taught investing at school level. There is so much advantage to doing this!
My biggest regret is that I started so late.
I wish I could have retired in my 50's. I'm 65 now, I started investing late . After some research, I found a strategy that helped. I'm pleased to say I'm retiring with at least $2 million.
@@GabreilSteve It’s worth noting that luck often plays the significant role in some cases, sometimes even more than the resources involved. Without it, its challenging
@@EbrahamAljalil luck plays a part, especially in the short term. I noticed that when results remain consistent, it indicates something more than just luck. research was the challenge until It led to Julie Ann Lerch, a fund manager. her strategy made sense, it contributed to growing 950k into this and counting
@@GabreilSteve I looked for the name online and found her page.I will get intouch with her,Thanks for the help
I emailed and made inquiries. Thanks for the help
I learned in my high school economics class
I keep my Roth IRA simple, slightly different opinions mentioned in the video, 75% VTI & 25% SCHD
A good argument for adding international stocks, despite how the US has outperformed international for so long, is the concept of reversion to the mean. Worst case scenario, it never outperforms but it's only a small portion of your portfolio anyway. Best case scenario, it's a good partial hedge. You never buy insurance because you're never going to need it.
Unfortunately for international funds, the mean you revert to is low.
@enonknives5449 that's why international should only be a small percentage of your portfolio. American stocks have been very dominant for a while, but it's unlikely that this will always stay true.
@@thomaslunden -- US stocks have outperformed in the long run and are likely to outperform in the long run. International stocks have infrequently outperformed and are likely to outperform only infrequently. That's how reversion to the mean works. I agree that international stocks should only be a small percentage of your portfolio...preferably zero. However, I might consider an international high dividend ETF like VYMI yielding 4.38%, since I'd be chasing the yield and not the growth.
I’ve been following international stock funds since 1994 and they just don’t perform that well, not as well as US large cap stock funds.
@@SnowyQuakerParrot -- Exactly.
My Roth is 60% VTI, 20% VXUS, 20% AGG. I have 13 yrs until retirement.
Good luck! I'm sitting at 18 years until retirement, myself
NVDA ...
What etf’s are you investing in?
FYI.....the expense ratio is cheaper with SPLG (.02) than VOO (.03). Love me some State Street!
Dividend rate on VOO is much higher.
Best for me is VGT-VTI and SCHD that’s the only ones u might need
This was the best explanation on what investments go best in an account type I’ve seen, thanks!
I prefer to put SCHD in a taxable account, because the dividends are likely to be low for a long time compared to your ordinary income. The qualified dividends will also be taxed at the lower long-term capital gains rate...which for many people will be 0%. The taxable account also gives you access to money that can be withdrawn without penalty. In the long run, you will want to use the SCHD dividends for funding retirement, and you can do that without selling something else and paying a lot of capital gains taxes to rebalance your allocation.
I would use tax-deferred IRAs/401Ks for growth stocks/ETFs, and for any income producing assets (bonds, REITS) since those would be taxed at the ordinary income rate anyway.
My Roth IRA is all in Vanguard Growth. Good call.
i would do the exact opposite. dividend/income in roth. growth in taxable.
to each their own.
@@michaelak1416 -- Growth in taxable also makes sense because there wouldn't be taxes on growth until you sell. You're in control. Dividends and income in Roth also make sense. Literally everything is better in a Roth. It is the tax-deferred IRA/401K that causes people trouble.
If I had to do it over again, I would have maxed out Roth, only put enough in 401K to get the match, and put everything else in taxable. Unfortunately, I'm thirty years too late.
@@enonknives5449 maybe it isn’t too late.
You should read your tax form, unless you’re making less than $47k included the dividends, it’s not taxed at 0%
@@rubiirae -- Long-term capital gains are still a lower tax rate. Also, I'm not single, so I can make $94K over the standard deduction.
Great video What would be the best 5 etfs for a beginner with a lump sum ready to invest ?
I love VOO and have some VTI, too. In my Roth IRA as well as taxable brokerage account. The volatility lately has made me sit on the side to buy more. Just holding that extra cash in a money market getting 5.4% 7 day yield lately.
VTI has been good for me in all my account types
Can you do Fidelity also? Thanks.
FXAIX Fid 500 simple
@@WeBeatMedicare6969would you consider Fidelity Large cap Technology as well as fidelity NASdaq…
I’m so confused now! I’ve always thought the best place in invest REITS is in a Roth or HSA, to take advantage of tax optimization.
I invest REITs into my Roth and HSA. For example, I invest in Reality Income (O) and it’s out performed the S&P 500. It’s not a large portion of my portfolio. REITs don’t do well in high interest environments but they do trend better during Bear markets. I’ve done very well with my REITs in my accounts.
Just need categories
Fundamentals
Growth
Dividends!
Just VT and chill.
My HSA is 60% VT, 20% BNDW, 10% GLDM, 10% REET. (half of my portfolio is FDRXX while interest rates are high. This year I'll start changing that percentage more towards this portfolio).
Great video! Thanks for the breakdowns! I’m going to have to watch again to fully absorb I think.
How’d you know it was a good video if you didn’t watch?
I do Total market and international also. But I have a REIT fund thrown in there as well. Even though I know REIT funds are crap….I am hopeful it makes a comeback in the future.
Good video. It's good to see what other people are doing. I still prefer my schd.
I have VTI-SCHD-VT and VICI
How do you feel about a covered call ETF like JEPI or JEPQ in a ROTH IRA? Any pitfalls that should be considered in a ROTH in your opinion?
Thanks guys, great episodes. When selecting factors, is there any reason to diversify exposure on that factor with multiple vehicles instead of choosing just one . For example, if I wanted to allocate 15% in to Value . Can I allocate 5% SPYV, 5% to SCHV, and 5% VTV? What are your thoughts?. Thanks in advance.
I just started a Roth. I'm starting by keeping it simple with VOO/SCHD. Wonder if keeping SCHD in there and using my taxable as a spillover is a good move? Or maybe that's complicating things and just have it in taxable?
Does re-investing dividends into a roth ira count towards the contribution limit?
No. Only the cash you put in counts toward the limit.
Do you have a video on Reits? I was thinking to put those in my Roth but after this video Im not sure?
Someone MAY have asked for clarification BUT I spoke to Someone at Charles Schwab they said all funds put into a ROTH are tax free including Dividends. Others have also said the same. Can you please clarify why they don't believe the dividends are taxed in a Roth IRA?
Love your content. I have been watching for years. Lately I noticed a lot of background music in the videos. I could be in the minority of your subscribers, but I find it distracting. It will not be anything to make me stop watching but I wanted to provide feedback in case I was in the majority. Have a wonderful holiday season.
Appreciate the feedback. I agree with you. I've been asking my editor to decrease the volume because I also found it distracting when I'd re-watch some of the videos with headphones on.
What ETFs do you recommend holding in a ROTH IRA while in retirement and making withdrawals?
Thank you sir .
Welcome!
So what 4 etf's should go into a Roth IRA? VUG, VTI, VOO, and VXUS?
From a tax sheltered perspective those would be the types of funds that would make the most sense to hold in a Roth IRA.
@JarradMorrow okay thank you, I'm trying to get all of this figured out. I'm guessing I need to make an account with Vanguard. Then I'll try to swim through the website and see how to get things going
You don't have to use the Vanguard platform to purchase Vanguard ETFs since they can be purchased anywhere without additional fees. I know some people aren't big fans of the Vanguard platform so open an account with them and a few other brokerages to see which one you like best before depositing money into Vanguard.
Will a well balanced Roth IRA make me a more generous lover?
Very conservative approach👍, what about YieldMax covered calls Etfs in a Roth IRA?, distributions are monthly instead quarterly, especially for people ready for retirement, these could generate a huge cash flow for retirees.
Great video but I was a little confused about SCHD and REITs with dividends.. you were saying they are better in a traditional IRA or 401k where the dividend would not be taxed?? I'm under the impression you would be taxed in those, and not taxed in the Roth..
I am confused, too.
He said it's better to use the Roth for growth, US and international funds because growth and overall funds generally outpace dividend, REIT & bond funds, and international is a hedge. I'm not totally convinced about leaving SCHD out of a Roth, however.
@@1776_Reasons which reit and bonds do you recommend for the roth?
Wonder you consider FSPGX a Growth Index fund…. Bc I also have the Fidelity NASDAQ… I’m I overlapping or do I need another growth index fund or etf????
What are some examples of income bond efts?
What would the difference be between VOO and FXAIX?
Their the same just voo is vanguard and fxaix is fidelity.
FXAIX is cheaper and has a lower expense ratio.
Ex-US I prefer VEA.
Growth SMH, VGT, VONG, XBI, and VCR.
Dividends DGRW, DGRO, VOO, PRF, and SCHD.
Bonds BND, VGIT, VCIT, and VCSH.
Good info
XLK 💪🏽
What about small cap value ETFs? They are more risky but have outperformed large cap value and large cap growth over multi-decade periods.
Yes, those would be good for a Roth IRA
Same argument as with International in my opinion. One day the Magnificent 7 will slow their outperformance so it is wise to diversify beyond them.
Does it make more sense to include leveraged ETFs in the Roth IRA account for mid-term investments?
So VOO or VTI
VOO 😅
Good video as always... Except those graphics make me feel like I have vertigo LOL
Haha oh no, sorry! All of them or the features of particular ones? Looking for feedback so we can improve on the graphics if it's an issue.
@@JarradMorrow, if it's the same feature that made me feel dizzy, it was the wobbling of the supporting data such as the "Exposure" spreadsheets and "Stock Style" graphs.
I haven't noticed any issues with the graphics in Jarrad's videos but flashing, spinning and wobbling graphics do make me feel like my vertigo is starting. Thanks, Jim
@@JarradMorrow Ahh I have seen this one! haha. It's the type of graph at 5:45 and 13:20... Could of had a drink or two. LOL
I am very new to the Roth IRA (made my first deposit on 9/13/24). Is it recommended to invest in all 4 of these or pick one or two of these? I watched a previous video on having a 2 fund portfolio that mentioned VOO and VTI. Thanks for the help.
Fxaix. Look it up bro. Very low expense. Top 500 us companies
I have VOO and FTEC
This seems to be focused on growth over the long run, more appropriate for my kids in their 30's. Which ETFs are best for me (64) as I still want to work & contribute to my Roth for another 6 years? I'm guessing income over growth, no?
At that age I would honestly stick to VOO or FXAIX.
My Roth is full of REITs (GLPI, VICI, RITM, GNL) so I'm confused why the recommendation to put them in taxable? My taxable has stuff I'll hold forever like VTI and FSGGX so worst case scenario is long term cap gains.
Question, I am at the peek of my earning and so I am in a high tax bracket. Would that mean having my dividend stocks in my Rath IRA is better because it isn't added to my income? Having VOO in my taxable account let's me delay realizing that growth?
You are mistaken. It’s not wrong to place a dividend ETF if a Roth account , it just doesn’t grow like a growth ETF. So your not maximizing tax free growth. However if you have enough growth and require diversification then by all means use the Roth for a dividend etf . It is wrong to place any dividend etf in a traditional Ira since now you’ll be paying ordinary tax rather than the reduced tax rate that qualified dividends pay you. That’s a mistake. And in fact you really should never have a traditional 401K or IRA unless you have no choice ( over a Roth) and there is a matching employer contribution. Any type of IRA or 401k is merely an IOU to the federal / state governments. Smoke and mirrors and were only created as a forced savings for the inept saver.
My ROTH IRA -
VTI - 20%
SCHG - 20%
SPY - 20%
SMH - 20%
QQQ - 20%
Buy volatility folks! Preserve what you have or get rich. 😮
Anyone heard of TQQQ?
Looking at the charts (1yr, 3yr, 5yr, Max) for VXUS against VOO tells me to stay away for international.
Unfortunately that past performance doesn't tell us how things will play out in the future. It's definitely possible that VOO could continue to outperform but none of us know. Which is why global diversification will set you up to capitalize on whatever happens.
And a broken clock is right twice a day, but it is still broken. $10k invested in VOO since 2014 is now worth almost $38k, while VXUS is worth less than half of that.
Again, you're referring to the past and not the unknown future. I'm not suggesting I know what's going to happen either, though, which is why I promote global investing. But if going 100% U.S. stocks works for your personal investing style and behavior, then stick with it because that's all that matters 👍🏻
@@xlavahott4547do you think voo is still worth investing in it at this moment since it’s at a all time high currently?
This is perfect I turned 18 yesterday lol
Good job... Now be sure to protect you wealth. Don't get married. Or have a solid prenup. And always have a DNA test after every kid. Good luck.
Great video. Thanks, Jarrad! I'm a bit lost on your thoughts on dividend stocks in a roth. I thought you would want to shield high taxes from dividends and reit payouts in a roth. I would be happier with 1 million dollars in SCHD and O in a roth than 1 million dollars in VUG and SCHG. HELP! :)
REITs should be in a Roth because they don't pay out qualified dividends taxed at the capital gains rate.
Other securities paying qualified dividends can be held in taxable accounts.
Option trading should be done only in retirement accounts as gains are taxed at short term rate otherwise.
Since Roth has no tax at all, why does capital gain and dividends matter?
you forgot IBIT or FBTC.
FBTC -10.44% in the last 6 months.
@@shaereub4450 yet up 28% YTD. Please confirm.
@@shaereub4450 it's up 28% YTD unfortunately. Don't get shaken out by small moves.
@@shaereub4450expand out in the next 10 years
Congrats dude, too bad you dont invest in these. hope you get you subs.
Tesla for roth ira is not a good idea I guess.
I have VTI, SMH, and SCHD and im riding that train for the next 20 years
Same I threw vgt in also
What’s smh
@@Tigger-w6x VanEck Semiconductor ETF (SMH).. I may switch to VGT for the lower expense ratio. I'm not pulling any money out for 15-20 years
I see your thought process but if a roth ira is ALL you have then having a mix of SP500 and dividend growth is ideal especially over 50
My core in my traditional is VTSAX mutual fund or (VTI). My roth core fund is VOO. I won't disclose the other funds because they are very controversial and unconventional.
No FEDERAL taxes, that is.
8 minutes in…. 4 separate 30 sec TH-cam commercials and one in video advertisement…. Sheesh TH-cam is getting unbearable
They're so inconsistent with when they show ads. Sometimes it's a lot and sometimes it's barely any. Unfortunately they choose when ads are served up to viewers so I don't have any control over that.
did not want to hear Gelato in the video on Investing.
I want to be a Harlem globetrotter that gets paid in candy. Guess we can’t always get what we want. Thanks for checking out the video 👍🏻
VOO 90%, BND 10%
See you in 30 years
Out of curiosity, why do most people choose VOO over SPLG? I know it’s personal opinion. Just curious
if you look up and compare the two tickers over the past 10 years, VOO has returned 236.28% vs SPLG has returned 233.07% even though they both follow the S&P index.
90% VT, 10% BNDW
We wont have a Country in 5 yrs much less 30
@@commonsenseisntcommon1776 that’s what the south said in 1865
Daddy daddy,!,!
Please be my daddy.
Nice video and recommendations. Any thoughts on where the following ETFs should be placed into? GPIQ / iWMi / TLTW . Each are relatively NEW ETFs that might be considered by some investors.
FYI Your opinion on dividend ETFs in a roth Ira is a minority one
If a logical approach to asset location is considered to be a minority one then that sounds good to me 👍🏻
'very low 0.4 expense ratio' lol
.04% expense ratio is 40 cents per $1k. I know 2nd grade math is difficult, but try to keep up.
VOO Brokerage Traditional Roth / VFIAX 401k
Fxaix
Daddy daddy,!,!