With the tax filing deadline of April 18 a few weeks away, investors still have some time to make contributions to their individual retirement accounts (IRAs). While some prefer traditional IRAs, many others favor Roth IRAs; both retirement products provide amazing tax benefits.
Contributions to traditional IRAs can be deducted from taxable income, but you'll owe taxes when you withdraw the money in retirement. With Roth IRAs, there is no upfront deduction, but withdrawals can be made tax-free.
IRAs allow investors to buy individual stocks, bonds, ETFs, or mutual funds. ETFs are becoming increasingly popular since they are excellent tools for building a diversified retirement portfolio at a low cost. Furthermore, income-paying ETFs are better suited for an IRA since income is deferred or sheltered from taxes.
The Schwab U.S. Dividend Equity ETF SCHD focuses on the quality and sustainability of dividends. It invests in high dividend stocks with fundamental strength, like Broadcom AVGO and Texas Instruments TXN.
The iShares Select Dividend ETF DVY holds high dividend paying companies with at least 5-year history of paying dividends. Valero Energy VLO and Exxon Mobil XOM are among the top holdings.
The SPDR S&P Dividend ETF SDY looks for high dividend-paying companies that have consistently increased their dividend for at least 20 consecutive years. V.F. Corporation VFC and Walgreens Boots Alliance WBA are its top holdings currently.
To learn more, please watch the short video above.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>Texas Instruments Incorporated (TXN) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
V.F. Corporation (VFC) : Free Stock Analysis Report
Valero Energy Corporation (VLO) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Walgreens Boots Alliance, Inc. (WBA) : Free Stock Analysis Report
SPDR S&P Dividend ETF (SDY): ETF Research Reports
iShares Select Dividend ETF (DVY): ETF Research Reports
Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
