A Roth IRA is one of the best retirement accounts to have. While a Roth doesn’t offer an up-front tax break, your contributions grow tax-free and when you withdraw your money in retirement, it’s all tax-free — including any investment earnings. You can build a nest egg that the government will never be able to touch again.
It makes sense to take full advantage of this account by maxing out your annual contributions if you can. But what are the best investments for your Roth IRA? You’ll want to focus on investments that have a strong likelihood of growing a lot over the long term, but with little chance of going down. That means steering clear of highly speculative investments.
Here are some of the top investments to consider for your Roth IRA and why they may work for you.
8 best investments for your Roth IRA
| Investment | Holdings | Key features |
|---|---|---|
| S&P 500 index funds | Companies in the S&P 500 | Instant diversification |
| Dividend stock funds | Stocks that pay dividends | No taxes on dividends |
| Value stock funds | Stocks that are a relative bargain | Lower volatility |
| Nasdaq 100 index funds | The largest non-financial companies in the Nasdaq | Exposure to big tech stocks |
| REIT funds | Companies that own, operate or finance income-producing real estate | High dividends |
| Small-cap funds | Smaller companies | Potential for higher returns |
| Bond funds | Bonds | Lower returns, but less risk |
| Target-date funds | Stocks, bonds, cash and other investments | Automatic rebalancing and reallocation |
All fund data below is from Morningstar as of Nov. 13, 2025.
1. S&P 500 index funds
One of the best places to begin investing your Roth IRA is with a fund based on the Standard & Poor’s 500 Index. It’s a collection of more than 500 top U.S. companies, including many of the names you know and use every day (Amazon, Apple and Microsoft, for example).
Over time, the index has performed well with average annual returns of about 10 percent. With this index fund, you’ll enjoy a broadly diversified portfolio that includes some of the world’s strongest companies, meaning you’ll have reduced risk and have the potential for solid gains. It also doesn’t hurt that these funds often come with low expense ratios, meaning you won’t pay a lot to the fund’s managers, so more of your returns stay in your pocket.
| Fund | 5-year annual returns | Expense ratio |
|---|---|---|
| Fidelity 500 index fund (FXAIX) | 15.82% | 0.015% |
| Vanguard S&P 500 ETF (VOO) | 15.79% | 0.03% |
| SPDR S&P 500 ETF Trust (SPY) | 15.03% | 0.095% |
Learn more: Top S&P 500 index funds
2. Dividend stock funds
Dividend stock funds are another popular option. Companies that pay dividends tend to be in mature industries and generate a ton of cash, allowing them to distribute the money to shareholders. The best companies increase their payouts annually for decades, turning your investment into a dividend dynamo. Plus, they tend to be less volatile than an average fund.
Dividend stock funds can be particularly attractive in a retirement account because of their relative safety (they’re in a mature industry). Even better, when held in a Roth IRA, the dividends are not subject to tax. Investors can roll dividends right back into the dividend fund and keep the payouts growing year after year.
| Fund | 5-year annual returns | Expense ratio |
|---|---|---|
| Vanguard Dividend Appreciation ETF (VIG) | 11.63% | 0.05% |
| Vanguard High Dividend Yield ETF (VYM) | 13.31% | 0.06% |
| Schwab US Dividend Equity ETF (SCHD) | 10.01% | 0.06% |
Learn more: Best dividend ETFs
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