4 Best ETFs to Supercharge Your Roth IRA

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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 A Roth IRA offers significant tax advantages, where investments grow and can be withdrawn tax-free during retirement.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.

[thomaslunden]

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.

[johnny_blades]

expense ratio is cheaper with SPLG (.02) than VOO (.03). Love me some State Street!

[enonknives]

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.

[eladiojortizavellino]

Best for me is VGT-VTI and SCHD that’s the only ones u might need

[stewdogg]

My Roth is 60% VTI, 20% VXUS, 20% AGG. I have 13 yrs until retirement.

[silverrush]

Good video. It's good to see what other people are doing. I still prefer my schd.

[ericscott]

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.

[paulj]

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.

[LastCalvertStanding]

Great video! Thanks for the breakdowns! I’m going to have to watch again to fully absorb I think.

[jairfarias]

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.

[RB-jeyj]

Just need categories
Fundamentals
Growth
Dividends!

[jmack]

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..

[Biz]

This was the best explanation on what investments go best in an account type I’ve seen, thanks!

[shaereub]

Just VR 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).

[RichardAkin-qjxt]

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.

[TheLightningStrm]

I keep my Roth IRA simple, slightly different opinions mentioned in the video, 75% VTI & 25% SCHD

[HannibalOrMaybeJustRex]

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?

[rpshah]

What about small cap value ETFs? They are more risky but have outperformed large cap value and large cap growth over multi-decade periods.

[fins]

Good video as always... Except those graphics make me feel like I have vertigo LOL

[hogue]

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! :)