4 Winning ETFs to Spritz Up Your Retirement Portfolio
It turns out that regular, index-based retirement portfolios are in fact enough to help you retire comfortably. However, once you've developed a solid core of globally diversified index funds, adding satellite positions designed for a specific purpose can create value. Here, we'll look at four ETFs that might make your retirement portfolio a bit more interesting.
The Schwab US Dividend Equity ETF (NYSEMKT: SCHD) is an exchange-traded fund that comprises U.S.-based companies that pay consistent and meaningful dividends. Stable dividends are desperately sought after by many retirees and pre-retirees as reliable income. Moreover, dividends are important because you can develop a stream of passive income without needing to sell any underlying shares of your investment.
A fund like this is best held in a tax-deferred retirement account like a 401(k) or pre-tax IRA. The reasoning is simple: When you receive dividends in a tax-deferred account, you won't pay tax upon receipt. You can receive dividends in a tax-deferred account for many years without paying a dime in taxes; you'll only owe the IRS any money when you withdraw money from the account. And this may not occur until you're age 72 and required minimum distributions begin.
Source Fool.com
