Planning for retirement is one of the most important financial steps you can take. With rising living costs and longer life expectancies, building a strong retirement fund is more important than ever. One of the smartest ways to do this is by investing in an Individual Retirement Account (IRA).
IRAs offer tax advantages and can grow your money over time if you choose the right funds. But with so many IRA fund options available, it’s not always easy to know which ones will give you strong returns, low costs, and safety. That’s why it’s smart to focus on funds with a good past performance, wide market coverage, and low management fees.
In 2025, three IRA funds stand out as top choices for long-term investors: Fidelity 500 Index Fund (FXAIX), Vanguard Total Stock Market Index Fund (VTSAX), and Schwab International Index Fund (SWISX). These funds offer a mix of U.S. market coverage and global exposure, making them solid picks for a balanced and growing portfolio.
FXAIX: Trusted Growth with Big U.S. Companies
The Fidelity 500 Index Fund (FXAIX) follows the S&P 500, which means it invests in the 500 largest companies in the U.S. This includes major names like Apple, Amazon, and Microsoft. It’s known for steady returns and low risk.
With a very low expense ratio of just 0.015%, it’s also one of the cheapest index funds to own. Over the last 10 years, it has averaged a return of 13.5% per year. Because it focuses on large, stable companies, this fund is a top choice for cautious investors who still want to see solid growth.
VTSAX: A Full View of the U.S. Market
The Vanguard Total Stock Market Index Fund (VTSAX) covers the entire U.S. market. That means it includes large companies, as well as mid-sized and small companies. This wide coverage helps increase growth chances while spreading out the risk.
It has a slightly higher fee than FXAIX at 0.04%, but it’s still very low-cost. Its 10-year average return is about 12.8%, which is strong. Since it holds more than 3,500 U.S. stocks, VTSAX gives investors a broader mix of the market than funds that only track the biggest companies.
SWISX: Reduce Risk with International Stocks
The Schwab International Index Fund (SWISX) helps investors go beyond the U.S. by adding international stocks from places like Europe, Asia, and Canada. This makes it a great way to balance your portfolio and protect against U.S. market dips.
The expense ratio is only 0.06%, which is much lower than many other international funds. While the 10-year average return is lower at 8.2%, the fund adds important global diversification. It’s a good choice if you want to avoid putting all your money in one country’s market.
Smart Tips to Grow Your IRA
Building a good IRA isn’t just about picking a fund. You also need to follow the right strategies to keep your savings on track.
1. Invest Regularly with Dollar-Cost Averaging
Put in a fixed amount of money every month or quarter. This helps you buy shares at different prices and lowers the impact of market ups and downs.
2. Spread Out Your Investments
Don’t put everything into one type of investment. A good IRA includes index funds, bonds, and international stocks. This mix lowers risk and keeps your growth steady.
3. Check and Adjust Each Year
Once a year, review your portfolio. If one part has grown too much, move some of it into other parts to keep your balance. This is called rebalancing and helps you stay on track with your goals.
Build a Balanced Retirement Fund
Each of these three IRA funds has its strengths. FXAIX is great if you want strong U.S. growth with low fees. VTSAX gives more variety in the U.S. market. SWISX adds safety by investing in global companies. Putting them together gives you a smart mix of safety, growth, and risk control.
With regular contributions, annual reviews, and a focus on the long term, you can build a solid IRA portfolio. Planning your retirement with the right tools now means a more comfortable life later on.