Chicago, IL – A couple in their 50s in Chicago has successfully maximized their retirement savings by investing a significant portion of their income wisely. With a mortgage rate of 2.75% and a low monthly payment, the couple has managed to put away a substantial amount of money for their retirement years.
Their focus has been on growing their dividend income in brokerage accounts and Roth IRAs, and they have a total of $842,000 in retirement accounts, along with a $40,000 emergency fund and $63,000 in mortgage debt.
The couple is now questioning whether it makes sense to invest in large-cap ETFs, given the perceived expense of these funds. Large-cap funds are known for focusing on companies valued at more than $10 billion, and ETFs are seen as a stable option for investors, providing a level of stability in a portfolio.
One example of a large-cap ETF is State Street’s SPDR S&P 500 ETF Trust, which comprises stocks of well-established companies such as Apple, Microsoft, Nvidia, and Tesla.
While the price of one share in large-cap ETFs may seem high, it’s essential to consider the favorable fees associated with these funds. Additionally, it’s worth noting that large-cap ETFs can cover non-U.S.-based companies, providing a broader range of investment opportunities for retirement.
Financial planners recommend that most clients should have anywhere between 20% to 50% of their portfolio in large-cap ETFs, as they play an essential role in creating growth. Reviewing an ETF’s manager tenure, net assets, overall rating, and past performance can provide insight into its potential for growth.
Furthermore, a diversified portfolio is crucial for maximizing the benefits of all types of investments and protecting oneself from potential underperforming assets. Seeking advice from a trustworthy financial planner can help navigate the complexities of retirement investments and ensure a well-constructed portfolio.