Why These Eight ETFs Belong in a Retirement IRA
Most people spend decades putting money aside for retirement. What doesn’t get enough attention is what to do with those funds once you’re actually retired. The goal shifts from accumulating more savings to generating enough steady income to live on, protecting the value of your money and not running out of funds.
That requires a different investment strategy. Growth-focused funds that aim for maximum upside can carry too much risk when you are drawing down your assets in retirement. And parking everything in bonds exposes you to the slow erosion of purchasing power over a long retirement. Inflation doesn’t magically stop once you retire.
These eight funds cover every major asset class: stocks and bonds, dividend paying stocks, international stocks and even alternative assets like gold. Held inside a traditional or Roth IRA, dividends compound without the capital gains taxes eating into your returns each year. If you want a better idea of what creates tax drag in taxable accounts, our article on 5 Tax-Inefficient Investments to Avoid in Taxable Accounts might be worth a read.
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What Do the Best ETFs Need to Do in Retirement?
Low Costs and Asset Allocation Matter More Than Most People Realize
Low cost ETFs matter way more in retirement than during the accumulation phase. With no new contributions coming in, lower expense ratios can really add up. On a $500,000 portfolio held for 20 years, the difference between 0.03% and 0.75% can be tens of thousands of dollars in lost compounding. Low costs and low expenses are the bedrock, not a nice to have.
Beyond fees, the best retirement ETFs provide built-in diversification across multiple asset classes. Individual securities carry concentration risk that’s just not there with a broadly diversified exchange traded fund. A single stock can get wiped out, and that can’t happen to a fund holding hundreds or thousands of holdings.
The third thing to think about is the right asset allocation. Equity ETFs drive long term growth. Bond ETFs provide stability and steady income. Target date funds were popular because they are designed to rebalance automatically, but most of them come with higher expense ratios and less flexibility than building your own low cost index funds portfolio. A handful of well-chosen ETFs will outperform them on cost and control.
Equity ETFs for Long-Term Growth
VOO: Vanguard S&P 500 ETF – Core U.S. Growth Engine
Every retirement portfolio still needs some equity exposure. Without it, inflation quietly erodes the real value of your retirement savings over time. VOO is a solution that comes with almost no cost.
VOO tracks the S&P 500, which is an index covering about 500 of the largest publicly traded U.S. based companies.1 At over $1.4 trillion in net assets, a 0.03% expense ratio, and a 10-year average annual return of 14.78%, it’s the most cost-efficient way to own the long-term track record of the U.S. stock market.
Dividend ETFs for Retirement Income
SCHD: Schwab U.S. Dividend Equity ETF – Quality Income Built on Dividend Paying Stocks
Where VOO is built for appreciation, SCHD is built for income. The fund tracks the Dow Jones U.S. Dividend 100 Index, which screens for companies with growing dividends and strong financial fundamentals, focusing specifically on the quality and sustainability of dividends rather than simply the highest yield.2
As of April 10, 2026, SCHD has around $85.76 billion in net assets, a 0.060% expense ratio, and an average annual return of 12.92% since it started out. If you check the top holdings, you will see Lockheed Martin, Chevron, and Coca-Cola. These are in sectors like financials, consumer staples, and industrials, which are less likely to overlap with VOO’s tech heavy portfolio.
The idea behind SCHD in retirement investing is pretty simple: invest for growth when you’re young and then switch to income when you’re time to live off your savings. Well, for a lot of us, that time is now. According to Portfolio Visualizer, SCHD has a 0.44 correlation with the S&P 500 – it’s in the same direction, but it’s not going to move in lockstep, which is helpful in keeping the portfolio stable.
If you want to take a closer look at some other dividend ETFs that you might want to hold alongside SCHD, then 6 Best Dividend ETFs to Buy & Hold Forever covers several strong options.
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Bond ETFs for Stability
BND: Vanguard Total Bond Market ETF – The Low Risk Stability Anchor
Bond ETFs serve as a shock absorber for your retirement portfolio. When the equity market tanks, bonds usually hold their value, or even go up, giving you the chance to ride out the downturn without panicking and selling. BND gives you that stability at the absolute lowest cost.3
With $387 billion in assets and a 0.03% expense ratio, BND is the cheapest way to get the whole U.S. Investment-Grade Bond market. Over the long run, the returns average 2.00%, and that’s on purpose. BND isn’t in the portfolio to make you rich. Its job is to protect your wealth, to give you some income when your other investments are under pressure, and hold its value when the market goes off a cliff.
Covered Call ETFs for Monthly Income
JEPI: JPMorgan Equity Premium Income ETF – High Monthly Income for Lower Volatility
JEPI generates income every month by selling covered call options on the S&P 500. The premium on those options gets stacked on top of regular dividend payments from stocks. The result is a yield way higher than you’d get from standard stock ETFs or mutual funds.4
With over $43 billion in assets, a 0.35% expense ratio, and a 7.6% 30-day SEC yield, JEPI is the largest actively managed ETF in the U.S. And the catch is that the strategy caps gains in strong bull markets – but you do get lower volatility and a steady supply of income. According to Portfolio Visualizer, JEPI has a 0.78 correlation with the S&P 500, so it’s moving in the same direction, but it’s far from the same speed. If you want to learn more about getting regular income from ETFs, 4 Best Monthly Dividend ETFs to Earn Income in 2026 has some good info.
JEPQ: JPMorgan Nasdaq Equity Premium Income ETF – Tech-Tilted Monthly Income Amplifier
JEPQ uses the same covered call strategy as JEPI, but this time on the Nasdaq 100 rather than the S&P 500. The extra tech exposure means higher premiums and yields, but it also means more ups and downs. JPMorgan Chase manages both funds.5
With over $33 billion in assets, a 0.35% expense ratio, and an 11.4% 30-day SEC yield, JEPQ is said to be the fastest actively managed ETF to reach $20 billion in assets under management. According to Portfolio Visualizer, JEPQ has a 0.91 correlation with the S&P 500. It moves in the same direction, but at a much faster pace.
Holding about 10% of your portfolio in each of these funds can give you a good mix of monthly income from two major indexes without concentrating in single equities or high-yield bond ETFs.
International and Alternative Assets
VEA: Vanguard FTSE Developed Markets ETF – International Diversification at Low Cost
A retirement portfolio concentrated entirely in U.S. stocks carries real concentration risk. VEA can help assist with this. With the same 0.03% expense ratio as VOO, VEA gives you a slice of the developed markets in Europe, the Pacific and Canada, all at a very low cost.6
At a significant $222 billion+ in net assets, a 0.03% expense ratio and a 10-year average annual return of 8.74% VEA is one of the biggest and most cost-efficient international ETFs there is. The fund pays dividends on a quarterly basis and brings diversification across different geographies and assets that domestic stock market index funds on their own just can’t offer.
According to Portfolio Visualizer, it has a 0.49 correlation with the S&P 500, which means it will move in sync with U.S. markets but also have a bit of independence, just the right balance for a widely diversified retirement portfolio. Within an IRA, VEA sidesteps the foreign tax drag it creates elsewhere. If you want to get the full picture, check out 6 Best International ETFs Every Investor Must Know in 2026
GLDM: SPDR Gold MiniShares: Inflation Hedge With Low Expenses
With gold having essentially no to a slightly negative correlation with stocks and bonds, you get built-in diversification that no equity or fixed income fund can match. GLDM came onto the scene on June 26, 2018 as a low-cost gold option with an expense ratio of 0.10% that is way below most commodity investment funds.7
With around $20.9 billion in assets, a 0.10% expense ratio and a 64.21% total return in 2025, GLDM was the top performer in this portfolio last year. It tracks physical gold bullion with just price appreciation, no dividends. GLDM is listed on stock exchanges and moves on its own, independently of equity markets, offering protective coverage that stocks and bonds can’t offer. A 2% to 5% allocation will give you a decent level of protection at very low costs.
FBTC: Fidelity Wise Origin Bitcoin ETF – A Small Speculative Growth Sleeve For Your Retirement Portfolio
FBTC lets retirees hold Bitcoin inside an IRA without having to manage a crypto wallet, which is a major plus. Fidelity brought the fund to market in January 2024. At $23.27 billion in net assets and a 0.25% expense ratio, it is now the second-biggest Bitcoin ETF in the U.S.8
Bitcoin carries more volatility than any other investment on this list. A 2% to 3% allocation will give you a taste of Bitcoin’s long term growth potential without upsetting the rest of your portfolio. And if you put it inside a Roth IRA, then your gains will be completely tax-free – which is a major advantage of pairing a volatile, high-upside asset with a tax-advantaged account.
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ETF Comparison
Statistics sourced from fund issuer pages. Net assets and holdings as of April 10, 2026 where available. Returns as of the most recently available period that is March 31, 2026. Past performance does not guarantee future results.
| ETF | Inception Date | Net Assets | Holdings | Expense Ratio | 1-Year Return | 10-Year Return |
| VOO | Sep 7, 2010 | $864B | 518 | 0.03% | 17.67% | 14.11% |
| SCHD | Oct 20, 2011 | $86B | 104 | 0.06% | 13.96% | 12.37% |
| JEPI | May 20, 2020 | $45B | 121 | 0.35% | 7.85% | Since inception: 11.16% |
| JEPQ | May 3, 2022 | $36B | 108 | 0.35% | 19.81% | Since inception: 14.44% |
| VEA | Jul 20, 2007 | $217B | 3,900 | 0.03% | 30.06% | 9.25% |
| GLDM | Jun 26, 2018 | $31B | Gold | 0.10% | 49.77% | 13.84% (GLD) |
| FBTC | Jan 11, 2024 | $14B | Bitcoin | 0.25% | -17.98% | Since inception: 19.16% |
| BND | Apr 3, 2007 | $152B | 11,471 | 0.03% | 4.24% | 1.68% |
Sample Retirement IRA Portfolio
Here is a sample portfolio for a retiree around age 60, using the 110 rule (110 minus age equals target stock percentage), landing at roughly 50% equities and 50% in more conservative investments.
- VOO: 15%
- SCHD: 15%
- JEPI: 10%
- JEPQ: 10%
- VEA: 10%
- GLDM: 2.5%
- FBTC: 2.5%
- BND: 35%
The combined expense ratio is roughly 0.11% per year, a fraction of what most mutual funds, robo-advisors or managed accounts are going to charge you.
On Portfolio Visualizer, we run this portfolio through the 2025 calendar year and see a 10.51% return. That puts a pretty tidy sum into the realm of possibility. Starting from a median IRA and 401(k) balance of $544,000 for someone in their 60s, we’re looking at a balance of over $600,000 come year-end. And the distributions across SCHD, JEPI, JEPQ, VEA, and BND managed to crank out approximately $24,000 in income, without selling a single share.
The risk numbers are pretty compelling too. Standard deviation was 4.67% versus a whopping 10.5% for the S&P 500. Maximum drawdown was a relatively modest 2.94% versus 7.88% for the same benchmark. If you are after strong income, solid growth, and less volatility than the index, this portfolio makes a pretty compelling case.
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Individual Stocks vs. Index Funds
How Risk Tolerance Shapes the Portfolio
No single portfolio fits every situation. The allocation above is a starting framework, not a one-size-fits-all prescription.
Risk tolerance is highly personal. Someone who would sell equity holdings in a hard down market is better off with a larger BND allocation, even if it means accepting lower returns. Those with a pension or strong Social Security can afford more risk because fixed expenses are covered elsewhere. Investors entirely dependent on IRA withdrawals need more predictable income from bond ETFs and dividend ETFs.
Time horizon is another big factor. A 62 year old retiree in good health may have 30 years ahead of them, long enough for those equity ETFs to get back on track and compound some serious growth. But if you’ve got a shorter time horizon, you’ll probably want to shift the balance towards stability.
Now, a Roth IRA, where all the withdrawals are tax-free, is essentially the perfect home for the highest-growth, most volatile investments on this list. All the dividends and gains just keep compounding tax-free for life. For a more detailed look at structuring a Roth IRA with ETFs, I’d recommend checking out the 7 Best ETFs to Hold in a Roth IRA for Long-Term Investing.
Your Next Steps
These eight funds average 0.11% per year in fees, cover every major asset class, and balance income with long term growth inside a single IRA.
Start with the funds that are going to be most relevant to where you are right now. Need a bit more income? You might want to lean towards SCHD, JEPI and JEPQ. Want to see some growth? You can keep VOO as a bigger slice. Want less volatility? You can grow the BND allocation. And the truth is, low cost index funds with lower expense ratios have consistently outperformed high-fee active management at virtually every time horizon. They also all trade commission-free on just about every major brokerage platform.
For a side-by-side look at where to hold them, Best Brokerage Accounts for 2026 is a solid starting point.
