36-Year-Old Sitting On $2.5M IRA Asks Reddit: 'Do I Risk It For Growth Or Settle For Safety?' Experts And Amateurs Clash

One Redditor suggested two different ETFs that he also holds, mentioning they have tax advantages.

“My IRA is mostly [Vanguard Total Stock Market ETF (NYSE: VTI)] and [Vanguard Total International Stock ETF (NASDAQ: VXUS)]. Since it’s an IRA, you probably don’t have to worry about taxes. I’d buy VTI and VXUS and call it a day,” he wrote.

Replying to this comment, one Redditor asked, “Why VTI+VXUS when you can [Vanguard Total World Stock ETF (NYSE: VT)]?”

“Lower expense ratio. Opportunity to split across tax-advantaged and taxable, if you’re into that sort of thing. Opportunity to pick a different U.S./ex-U.S. ratio than VT, if you’re into that sort of thing,” a commenter explained.

“[Vanguard S&P 500 ETF (NYSE: VOO)] would be reasonable for the stock index (or [Fidelity 500 Index Fund (FXAIX)] with Fidelity),” another comment reads.

One Redditor commented on the time frame for retirement the poster mentioned and suggested he invest all his money in index funds.

“20-25 years is too long unless you absolutely love what you do. You could go 100% into index funds and tell yourself that you’re retiring at 50 or when the account hits $10 million… whichever comes first,” he said.

“Research what are the top ETFs and just throw everything in it. Example: VOO, [Vanguard Information Technology ETF (NYSE: VGT)], VTI, [Schwab U.S. Large-Cap Growth ETF (NYSE: SCHG)], [Schwab U.S. Dividend Equity ETF (NYSE: SCHD)], [Invesco Nasdaq 100 ETF (NASDAQ: QQQM)]… since you are planning to retire in 25 years, I would suggest don’t put any money in bonds,” one comment says.

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Balance the Investment

Several Reddit members of the r/Bogleheads community recommended the poster go for a balanced approach, combining both growth and safety.

One Redditor suggested a split where the majority of the funds are allocated to growth-focused assets and a portion is dedicated to fixed income to provide stability.

“80% in the stock index, 20% in fixed income. Forget about it till retirement,” he said.

A commenter recommended a slightly more conservative allocation, with 70% in U.S. stocks, 10% in international stocks, and 20% in cash or cash equivalents.

“70% in the total U.S. stock market index fund (and/or the S&P 500 index fund). 10% in the total international stock index. 20% in cash,” the user wrote.

“Allocation-wise, I would go simple, but since it’s already a large chunk of money, you may want to protect it. I would suggest at least 20%-30% into a stable bond fund, 50% S&P 500 fund or total market fund, and the final 20%-30% into an international fund,” another Redditor suggested.

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