29-Year-Old Seeks Third ETF For Roth IRA: 'Should I Go With VIG Or SCHG Or Something Else?' – Reddit Split Between Growth And Dividends

ETFs have become a pillar of modern investing because they offer diversification and low-cost access to the stock market. Many investors, especially those looking to retire early or close to retirement, use ETFs to build reliable portfolios.

Some of the most popular choices are VIG (Vanguard Dividend Appreciation ETF) and SCHG (Schwab U.S. Large-Cap Growth ETF). Still, they represent two different investing strategies: dividend and high growth.

For those investors using the tax advantages of their Roth IRA, choosing between these ETFs can be climactic in defining their long-term future. One such investor, a 29-year-old Redditor who recently started his investing journey, sparked a lively discussion in Reddit's r/dividends community because of his concerns.

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His goal is to create a retirement nest egg and because of that, he’s chosen to invest in two ETFs: 60% in VOO and 25% in SCHD. However, he’s struggling to allocate the final 15% of his portfolio.

“I can't decide if I should go with VIG or SCHG or something else,” the 29-year-old wrote.

While he likes VIG’s dividend aspect, he’s also charmed by SCHG’s growth potential, which means his returns will only amplify if he decides to invest in the latter. But is this the right choice?

“I like the aspect of dividends but not sure where to go,” the investor said.

His investing strategy consists of monthly contributions to his Roth IRA, but choosing a third ETF has left him at a crossroads. Because of this, he decided to seek advice from Reddit’s r/dividends community.

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Let’s delve into Redditors' most common recommendations for a third ETF and the 29-year-old's portfolio in general.

VIG, SCHG or Something Else? Reddit’s Advice

SCHG and SCHD are Complementary Choices

A common recommendation from Reddit is to pair SCHG with SCHD because the first ETF focuses on growth stocks and the second is a high-dividend yield ETF.

One commenter suggested that the two ETFs have minimal to no overlap, making them an excellent combo for a diversified and balanced portfolio.

“In my ETF portfolio I do VOO, SCHD and SCHG. SCHG and SCHD are perfectly diversified with each other with zero overlap if I recall correctly,” he said.

A second Redditor expressed the same opinion, stating that the two ETFs make a great pair.

“I like SCHG and if you already have SCHD, it's a good pairing because they have zero overlap with each other,” his comment reads.

Prioritize Growth ETFs

Many commenters suggested that the investor should target growth ETFs at this young age rather than dividend-focused ones. According to Redditors, growth-focused ETFs offer higher returns in the long run, which can add considerably when started early in life.

“At your age, I would steer more toward growth. SCHG is a great ETF,” a comment reads.

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Another Reddit member mentioned focusing on growth ETFs for a good chunk of years and then readjusting the portfolio when closer to retirement.

“From what I've gathered, we need to focus on growth ETFs and then rebalance our portfolio toward SCHD/JEPQ when we're 50 or so,” his comment says.

Consider VTI or VOO for Broader Exposure

Several r/dividends members suggested the 29-year-old shift to VTI rather than keep his money in VOO because VTI provides better diversity and broader exposure to small- and mid-cap stocks.

“If you are only getting these 3, then you might consider VTI over VOO. VTI would add much more diversity with very similar returns and no downside,” a Redditor said.

Another commenter also recommended VTI instead of VOO, mentioning the stock exposure the first ETF offers compared to VOO.

“I would add VTI instead of VOO [ …] because you get exposure to small- and mid-cap too,” his comment says.

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