Key Points

• The market is reaching new heights, which can make it a fantastic time to invest.

• ETFs are a hands-off investment that can help you build wealth with minimal effort.

• No matter your goals or risk tolerance, there's an ETF for your portfolio.

The S&P 500 (SNPINDEX: ^GSPC) reached a new all-time high in late June, soaring by more than 26% from its low point in April, as of this writing. Many investors are optimistic that the market will continue climbing, making right now a fantastic opportunity to load up on quality stocks.

ETFs are a simple way to build wealth with little effort, but the right investments are key to maximizing your earnings. With the market reaching new heights, these three Vanguard exchange-traded funds (ETFs) could be poised for significant growth.

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1. Vanguard S&P 500 ETF

A staple in many investors' portfolios, the Vanguard S&P 500 ETF (NYSEMKT: VOO) is a rock-solid option both when the market is thriving and during slumps.

The S&P 500 ETF includes all the stocks listed in the S&P 500 index itself. From tech behemoths like Apple and Nvidia to century-old brands like Coca-Cola and Procter & Gamble, the companies within the S&P 500 are among the largest and strongest in the world -- making them more recession-proof than many smaller stocks.

Investing in an S&P 500 ETF is also an easy way to build a diversified portfolio with next to no effort. Because this fund contains hundreds of stocks across all sectors of the market, you're more protected if one or two stocks (or an entire industry) get hit hard during a downturn.

Despite its relative safety, though, this ETF can still generate life-changing wealth. The market itself has historically earned an average rate of return of around 10% per year. At that rate, investing just $200 per month could add up to nearly a quarter of a million dollars after 25 years.

2. Vanguard S&P 500 Growth ETF

If you're looking for the safety of an S&P 500 ETF but with a little more power, the Vanguard S&P 500 Growth ETF (NYSEMKT: VOOG) is a fantastic choice. This fund also tracks the S&P 500, but it only includes the companies with the most potential for growth.

This ETF shares many advantages with the Vanguard S&P 500 ETF, in that all the companies within the fund are among the largest and most powerful in the world -- helping to reduce risk. With 212 stocks across all sectors of the market, it also offers ample diversification.

However, because it focuses more on growth rather than simply following the market, it's also more likely to earn above-average returns. In fact, over the past 10 years, this ETF has earned an average rate of return of nearly 16% per year.

VOO data by YCharts.

At that rate, investing $200 per month for 25 years could add up to around $598,000. Just keep in mind that growth ETFs tend to thrive when the market is surging, but they're often hit harder than S&P 500 ETFs during downturns. The key to success with this type of investment is to hold your investment for several years, at least, to take full advantage of the upswings.

3. Vanguard Information Technology ETF

For those looking to add a powerhouse performer to their portfolio, the Vanguard Information Technology ETF (NYSEMKT: VGT) is a strong investment.

This ETF contains 319 stocks exclusively from the tech sector. Industry-specific ETFs can be a smart way to gain exposure to a particular sector of the market, with less effort than buying individual stocks. Also, when you invest in hundreds of stocks at once, you gain more diversification than you would by investing in just one or two stocks from each industry.

The Vanguard Information Technology ETF has a long history of earning above-average returns. Over the past decade, it's earned an average return of more than 21% per year. If it were to continue earning those types of returns, investing $200 per month would amount to more than $1.3 million after 25 years.

VOO data by YCharts.

Again, though, keep in mind that tech stocks tend to face more severe downturns during periods of volatility. If the market takes a turn for the worse, be prepared to hold your investment until the recovery period. This ETF has a long history of surviving downturns, but maintaining a long-term outlook is key.

Investing in ETFs can help you build life-changing wealth with less effort than buying individual stocks, and right now may be a fantastic time to invest as the market soars. By loading up on quality funds and holding them for the long haul, you could earn more than you might think.

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Katie Brockman has positions in Vanguard Admiral Funds-Vanguard S&P 500 Growth ETF, Vanguard Information Technology ETF, and Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Apple, Nvidia, and Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.

Contributing to a 401(k) is one of the best ways to save for retirement, and this type of account has several distinct advantages.

For one, it has a much higher contribution limit than many other retirement accounts. In 2025, you can invest up to $23,500 per year in a 401(k), while the contribution limit for traditional and Roth IRAs (individual retirement accounts) is just $7,000 per year.

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However, if you're contributing enough to max out your 401(k), it could potentially put you at a disadvantage in some ways. Here's how.

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Limited investment options could also limit your earnings

When you invest in a 401(k), you will generally have a handful of investment options set by your company plan, such as target-date funds or other types of mutual funds.

There's nothing necessarily wrong with these investments, but they offer little flexibility in where, specifically, you invest. If you prefer a more hands-on approach that is more likely to earn you above-average returns, it can be difficult, even impossible at times, to change your investments within a 401(k).

Other investing accounts, including IRAs, have far more options. From broad-market index funds to industry-specific exchange-traded funds (ETFs) to individual stocks, there are loads of investments out there that most 401(k)s simply don't offer. With the right strategy, these investments have the potential to significantly outperform many mutual funds included in 401(k) plans.

Also, many mutual funds found in 401(k)s have much higher fees compared to index funds and ETFs. Not only could you potentially earn more by investing in accounts outside of a 401(k), but you could potentially save thousands of dollars in fees, too.

Early (and late) retirement can be more expensive

If you plan to retire outside of your 60s and most or all of your savings are tied up in a 401(k), it can potentially throw a wrench in your plans.

Withdrawing money from your 401(k) before age 59 1/2 will generally result in a 10% penalty on the amount you withdraw. Individuals who are at least 55 years old can sometimes avoid these fees, but that only applies to the 401(k) plan through your most recent employer -- not all your older plans from previous jobs.

On the other end of the spectrum, delaying retirement well into your 70s can also create hiccups. At age 73, older adults will need to begin taking required minimum distributions (RMDs) from their 401(k) accounts. This is because 401(k) contributions are tax-exempt and tax-deferred, and mandatory withdrawals ensure that the government eventually gets its tax income.

There are also some RMD exceptions for those still working. If you own less than 5% of the company you work for, you could potentially delay RMDs until you retire. However, as with early withdrawals, this only applies to the 401(k) sponsored by your current company, not any previous accounts.

If you plan to retire far earlier or later than most traditional workers, it may make more sense to contribute to a Roth IRA, Roth 401(k), or taxable brokerage account. These options offer more flexibility in withdrawals, which can give you more choice in when you retire.

When it pays to stick with a 401(k)

Even if your 401(k) is less than ideal, there's still a fantastic reason to continue contributing to it: employer matching contributions. If your employer matches your 401(k) contributions, that's essentially free money -- and it could increase your savings by thousands of dollars per year.

Keep in mind, too, that there's no reason you can't contribute to multiple accounts. You may invest enough in your 401(k) to earn the full employer match, for example, then stash the rest in a Roth IRA to avoid RMDs. If you max out an IRA, you may then opt to put the rest in a brokerage account for more investment options.

The 401(k) is an incredibly powerful tool. But if you're putting all your eggs in one basket by maxing out this account, you could be missing out on fantastic perks from other types of accounts. With a more balanced approach, you can earn more, save more, and set yourself up for a better retirement.

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An estimated 69 million Americans will receive a monthly Social Security check in 2025. While the average adult age 65 and older relies on these benefits for close to one-third of their income, according to data from the Social Security Administration, many Americans depend on Social Security almost exclusively in retirement.

Ideally, it's wise to have a plan in place before you file to help maximize your monthly income. Although there's no one-size-fits-all solution for increasing your payments, there is one thing I'd highly recommend every person do before claiming: Make sure you know all the types of benefits you might qualify for.

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Lesser-known types of Social Security

Most people who qualify for Social Security will receive retirement benefits. You become eligible for this type of benefit once you've worked and paid taxes for at least 10 years, and you also must be at least 62 years old to begin claiming.

But even if you already qualify for retirement benefits, there are other types of Social Security you might be eligible for, too.

• Spousal benefits: You must currently be married to someone who qualifies for either retirement or disability benefits to receive spousal Social Security. If you're eligible, you could earn up to 50% of your spouse's benefit at their full retirement age.
• Divorce benefits: These are similar to spousal benefits, except you cannot currently be married, and your previous marriage must have lasted for at least 10 years. If you've been divorced for less than two years, you'll also need to wait to file until your ex-spouse begins taking benefits. Like with spousal benefits, your max payment is 50% of your ex-spouse's full benefit amount.
• Survivors benefits: If your spouse passes away, you may be entitled to 100% of their benefit amount in survivors benefits. While these are typically reserved for widowed spouses, they're also sometimes available for other family members -- like financially dependent parents, children, or ex-spouses.

You could receive any of these types of Social Security whether or not you qualify for retirement benefits. Even if you've never worked, you can still potentially collect benefits based on a family member's work record.

One important caveat to consider

If you are entitled to retirement benefits based on your work history, you can still receive spousal, divorce, or survivors benefits -- but only in certain circumstances.

Whether or not you qualify will depend on your retirement benefit as well as the amount you could receive from other types of Social Security. If your retirement benefit is higher, that will disqualify you from collecting other benefits. If it's lower, you'll receive the equivalent of the higher amount.

For example, say you could receive $1,000 per month in retirement benefits, and your spouse will collect $3,000 per month. In this case, your maximum spousal benefit would be $1,500 per month. The Social Security Administration will pay out your $1,000 monthly payment first, then you'll receive an additional $500 per month in spousal benefits.

If you were collecting, say, $2,000 per month in retirement benefits, that would be higher than your maximum spousal benefit -- disqualifying you from that benefit entirely.

Your age will still affect your benefit amount

Like with retirement benefits, exactly how much you'll receive will depend on what age you file. You can generally begin claiming as early as age 62, but filing before your full retirement age -- which is between ages 66 and 67, depending on your birth year -- will permanently reduce your benefit amount.

Unlike retirement benefits, though, waiting until after your full retirement age to take spousal, divorce, or survivors benefits will not increase your payments further. Also, survivors benefits, specifically, may have different benefit limits depending on your relation to the deceased and how many people are claiming on that person's record.

The average spouse or ex-spouse of a retired worker collects around $947 per month from Social Security, as of March 2025, while the average nondisabled widow(er) receives roughly $1,861 per month. These payments can go a long way for many people, so before you file, it's wise to ensure you're collecting every type of benefit possible.

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The Motley Fool has a disclosure policy.

Millions of seniors benefit from the Social Security cost-of-living adjustment (COLA), an annual raise that aims to help benefits maintain their buying power over time.

The official announcement for next year's adjustment won't come until October, but there are already predictions around what the 2026 COLA might look like. Right now, beneficiaries are on track to receive the lowest adjustment in years -- but there's an important reason that could change.

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The good and bad news about next year's COLA

The COLA is based on changes to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), a monthly index that tracks consumption patterns among U.S. workers.

To calculate the COLA, the Social Security Administration takes an average of the CPI-W values in the months of July, August, and September. It then compares that average to the previous year's figure from the same period. If the current number is higher, the percentage difference will become next year's COLA.

Based on CPI-W data so far this year, nonpartisan group The Senior Citizens League predicts that the 2026 COLA could land at around 2.3%. That would amount to a raise of around $46 per month for the average retired worker, and it would also be the smallest adjustment since 2021.

That said, there's a silver lining to a smaller COLA: It means inflation is slowing. The CPI-W essentially tracks inflation trends, so higher values year over year mean that consumer prices have been surging. When inflation ran rampant in 2022 and 2023, for example, we saw record-breaking COLAs of 5.9% and 8.7%, respectively.

While a smaller COLA may be disappointing on the surface, it's actually a good sign that prices are not increasing as quickly as they have in the past. Ultimately, that will generally have a greater impact on retirees' budgets than slightly larger Social Security checks.

One big factor that could change the COLA

A lot could change between now and October, primarily when it comes to inflation. President Trump's tariff policies could have a major impact on the economy and consumer prices, with experts pointing out that tariffs have a direct correlation with inflation.

"In the short run, tariffs are seen as inflationary," Ryan Monarch, economics professor at Syracuse University, told The Motley Fool in an interview. "[A]ll else equal, the more widespread the tariffs, the tighter Federal Reserve policy will likely be in order to tamp down upward price pressure."

In February, analysts at the Federal Reserve Bank of Boston reported that 25% tariffs on imports from Canada and Mexico and an additional 10% tariff on China could increase the core inflation rate, which excludes the more volatile food and energy sectors, by 0.8 percentage points. A 60% tariff on goods from China and 10% tariffs on other countries could increase inflation by 2.2 percentage points.

If inflation surges throughout the rest of 2025, fueled by tariffs, it will likely result in a larger COLA for 2026. That isn't necessarily a good thing for retirees, though, as higher costs will already take a significant bite out of most Americans' budgets before the COLA takes effect.

What does history say about times like these?

In many ways, we're in uncharted territory right now. So history may or may not be helpful in predicting where we're headed.

That said, historically, tariffs can often pave the way for a recession. In fact, analysts at J.P. Morgan announced in mid-April that they predict a 60% probability of entering a recession by the end of this year, triggered primarily by the Trump administration's tariff policies.

While tariffs themselves often lead to price surges, recessions also tend to drag prices back down since consumers generally have less disposable income. That could complicate COLA predictions throughout the rest of this year.

A lot can happen between now and October. Tariffs and a potential recession could have a major impact on consumer prices, which will influence the next Social Security COLA. For now, perhaps the best thing you can do is simply stay informed and keep your expectations in check.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.

One easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.