Your IRA can be a wonderful place to build wealth for your retirement. Part of what makes it great is that that your money can compound for you more efficiently because those plans offer tax advantages. Most investments inside your IRA grow tax deferred until you pull the cash out in retirement. If you invest in a traditional IRA, you might even get a tax deduction when you contribute, and if you invest in a Roth IRA, qualified withdrawals are even free from income taxes in retirement. 

The other key part of what makes an IRA great is that you can control your IRA. You can pick any broker and invest in a wide variety of assets, and with few exceptions, your money will benefit from those tax advantages designed into the way IRAs work. Unless you're into actively researching and monitoring your investments, exchange-traded funds (ETFs) can provide you with a great way to quickly and easily build your portfolio. With that in mind, these three ETFs are perfect for consideration in your IRA.

Earth as seen from space.

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No. 1: Buy the world, in one simple purchase

The Vanguard Total World Stock ETF (VT -0.27%) seeks to invest in a broad range of stocks across both developed and emerging markets around the globe. If you want to be invested in stocks but don't want to get into a guessing game of whether a given country's political risk could wipe out your investment in one fell swoop, this one is worth considering. With a global footprint among its investments, the loss of any one country's market would be painful but probably still survivable.

The Vanguard Total World Stock ETF carries a modest 0.08% expense ratio, which means that $999.20 of every $1,000 you invest goes to work for you. Its current yield is around 2.2%,  which is a higher income than you'd get from most developed countries' government bonds. On the downside, that income could get cut if the global economy remains soft for too long. On the potential upside, that it comes from equities means that it has the chance to grow over time as the related companies grow.

No. 2: Follow Buffett's advice and bet on America

American Flag with puzzle pieces on it that say economy and growth

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Warren Buffett is well known for his confidence in the long-term future of America and American businesses. As he was recently quoted: "Nothing can stop America when you get right down to it. Never bet against America." If you share his optimism, then the Vanguard Total US Stock ETF (VTI -0.63%) is a great ETF to consider. The fund attempts to invest across the totality of the US stock market, across large, midsize, and small companies.

With its minuscule expense ratio of 0.03%, virtually all your money goes to work for you. The Vanguard Total US Stock ETF's recent yield of around 1.85% is higher than the recent yield on 30-year U.S. Treasury bonds, which means you'll probably get higher income for the risks you take by investing in the ETF. If Buffett is right and America pulls out of the COVID-19 mess, you'll also get the growth from the underlying businesses the ETF invests in as they return to health.

No. 3: Target your recovery bets on real estate

Real estate has been one of the harder hit sectors from the COVID-19 shutdown. Nareit reports that shopping center landlords collected less than half their expected rent payments in May because of the pandemic shutdown. According to that same report, even healthcare-focused REITs collected a bit less than 90% of their expected rents in May. That tough collections level is behind the surge of recent dividend cuts among real estate-focused businesses.

That news is certainly not good. Still, if you believe that the pandemic will pass and that these businesses will generally recover, then an investment in the Vanguard Real Estate Index ETF (VNQ -0.18%) might be worth considering. A sector-focused fund, the Vanguard Real Estate Index ETF carries a higher expense ratio than the broader-market ones, but at 0.12%, it's still very reasonable.

Real estate generally carries with it higher yields than standard stocks, and that's reflected by this ETF's recent yield of nearly 4%. While that dividend may shrink a bit if the pandemic extends its reach, when things recover, so should the cash flows that ultimately feed those dividends.

This ETF is particularly worth considering in your IRA because the portion of your REIT dividends that are paid out of the REIT earnings are considered ordinary income and don't get preferential tax treatment. Since you'll be receiving the dividends within your IRA, taxes are a moot issue until you withdraw the funds.