Want $1 Million in Retirement? 9 Simple Index Funds to Buy and Hold for Decades.

Who doesn't want $1 million by retirement? Well, maybe those who are shooting for $2 million -- because $1 million is not likely to be enough for many people, especially those who will be retiring a decade or three from now. (Inflation can wreck havoc with your retirement plans, so be sure to factor it into your retirement planning.)

Since Social Security isn't likely to provide most or all of what we need -- the average monthly retiree benefit check was $1,975, or close to $24,000 for the year as of December -- most of us should be diligently saving and investing for retirement.

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One particularly effective way to do so is via exchange-traded funds (ETFs) -- funds that trade like stocks. Here are nine solid index ETFs to consider, each of which tracks a particular index.

Data source: Morningstar.com, as of Feb. 4, 2025. 

Each of these funds tracks a different index. The Vanguard S&P 500 ETF, for example, tracks the S&P 500 index of 500 of America's biggest companies. The Schwab US Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100™ Index.

The table shows that these funds have either very solid or very amazing performance records. The average annual gains of 19% over 15 years, for example, means your investment will increase in value more than 13-fold! Do not expect these kinds of returns going forward. Sure, you might get them or better ones, but they're not guaranteed.

For best results, consider spreading your dollars across a few index funds such as these, while adding to it over time and aiming to hold for many years.

You'll note, too, that each ETF sports either a relatively low expense ratio (annual fee) or a downright minuscule one. With a 0.03% fee, for example, a stake worth $1,000 will cost you $0.30 annually. Fees can make a big difference in your overall investment results, so favoring investments that will lop off as little as possible from your growing position is a smart move.

Here's a little information on these ETFs:

• Vanguard S&P 500 ETF: This is a basic S&P 500 index fund -- and, really, it can be all you need. It's widely diversified, offers a modest dividend yield with payouts that will increase over time, and it's less volatile than some of the more high-flying ETFs in this list.
• Vanguard Total Stock Market ETF: This fund will plunk your dollars in most of the entire U.S. stock market, so it will include lots of small-cap and mid-cap companies that don't make it into the S&P 500.
• Vanguard Total World Stock ETF: This is an even broader index fund, aiming to include most stocks in the world. So while the previous two funds are focused on the U.S., this one includes many other localities.
• Vanguard Total Bond Market ETF: For long-term growth, it's hard to beat stocks, but there can be a place for some bond exposure in our portfolios, too. And this is a well-regarded bond fund. It likely won't appreciate in value like a stock fund will, but it offers a hefty dividend, recently yielding 4.6%.
• Schwab US Dividend Equity ETF: It's always good to include dividend payers in your portfolio, and this fund has a great track record of delivering both income and appreciation. It recently yielded 3.64%.
• Schwab US Large-Cap Growth ETF: This ETF is focused on large, relatively fast-growing companies, and its performance record reflects that. Of course, when the stock market retreats, as it invariably does now and then, funds such as this will likely get hit. But long-term investors understand that over many years, the stock market has always rebounded from pullbacks and gone on to set new highs.
• VanEck Semiconductor ETF: If you're particularly bullish on various parts of the economy, you might seek out ETFs that focus on those parts. This is a particularly impressive semiconductor-focused ETF. You can also find ETFs focused on healthcare stocks, real estate stocks, energy stocks, and many other sectors or niches.
• Technology Select Sector SPDR ETF: This ETF holds around 70 tech stocks, with Apple, Microsoft, and Nvidia making up close to 40% of its value.
• Vanguard Information Technology ETF: This is another tech stock ETF with a broader reach, encompassing about 315 stocks. Its top three were the same as the previous ETF, making up around 45% of the fund's value.

So give these funds some consideration for berths in your long-term portfolio. One or more of them can help you reach a retirement goal of $1 million or even $2 million.