With Full Retirement Age For Social Security Changing, It’s Time To Buy These ETFs

For many people, retirement wouldn’t be possible without Social Security. But younger workers may need to wait longer to get those monthly benefits in full.

Anyone can claim Social Security starting at age 62. But if you want those monthly benefits without a reduction, you’re going to have to wait until full retirement age (FRA) to claim them.

FRA, however, isn’t what it once was. For a long time, it was 66. But years back, the Social Security Administration changes its rules so that FRA is now 67 for anyone born in 1960 or later.

And that’s not all. Social Security is facing the possibility of benefit cuts. And one potential solution to that problem is to push back FRA to age 68 or 69.

Since you may end up needing to wait longer to claim your Social Security benefits in full, it’s important to have access to outside income in case you decide to retire earlier. And that’s where the right investment portfolio comes into play.

Here are three ETFs you may want to load up on to grow your portfolio and set yourself up with enough income to retire when you want to.

1. The Vanguard S&P 500 ETF (VOO)

The Vanguard S&P 500 ETF, or VOO, has long been a popular choice among investors because it offers the benefits of instant diversification. VOO tracks the S&P 500 index, which is comprised of the 500 largest public companies by market capitalization.

In other words, when you invest in VOO, you’re putting your money into established businesses across a range of industries. Since inception, VOO has rewarded investors with a roughly 15% return.

Also, Vanguard is known for its low-cost ETFs in general. With VOO, you have an incredibly low expense ratio of 0.03%, which means you won’t lose a lot of your money to fees.

2. The Vanguard Total Stock Market ETF (VTI)

Vanguard Total Stock Market ETF, or VTI, is similar to VOO, except it offers even more diversification and potentially more upside. VTI tracks the stock market on a whole — not just the companies that are part of the S&P 500 index. As a result, VTI gives you access to small and mid-cap companies whose growth could really take off.

Of course the flipside of that is you may be taking on a bit more risk in your portfolio with VTI than with VOO, since smaller companies can be subject to more volatility. But if you’re many years away from retirement, investing in a total stock market ETF like VTI could make a lot of sense. And like VOO, VTI has a low 0.03% expense ratio that won’t eat away at your returns.

3. The Schwab U.S. Broad Market ETF (SCHB)

Vanguard may be known as the company that wrote the book on ETFs, but it could pay to look outside of Vanguard to grow your portfolio. And one option worth exploring is the Schwab U.S. Broad Market ETF (SCHB).

SCHB tracks the total return of the Dow Jones U.S. Broad Stock Market Index. That gives you access to the 2,500 largest publicly traded U.S. companies. So like VTI, it gives you even more diversification than VOO.

With a 0.03% expense ratio, it’s also a low-cost fund to add to your portfolio. You can use it as a complement to VTI or an alternative — the choice is yours.