There’s something really magical about an individual retirement account (IRA) when it comes to building a retirement portfolio. The secret to the IRA comes down to taxes. It doesn’t matter which type you choose — a Traditional or Roth IRA — any investment placed inside the account will be able to grow without the taxman getting his grubby hands on it.
Dividends, capital gains, interest income, etc. can compound tax-deferred or in the case of a Roth IRA, tax-free, until you need to spend it.
This ability makes the IRA one of the best tools regular investors have to grow their nest eggs.
This tax-deferred/free compounding also makes the IRA better suited for certain investments. Those that offer high long-term growth opportunities or potential tax hiccups are best when placed inside the account. And with exchange-traded funds (ETFs) covering every asset class at this point, the pairing of IRAs and ETFs is a match made in heaven.
With that in mind, here are three of the best ETFs to take advantage of everything an IRA has to offer.