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3 ETFs To Keep You Invested After Retirement

3 ETFs to Keep You Invested After Retirement

Exchange-traded funds (ETFs) are among the best ways to invest in stocks, especially for those who don’t have time to research and monitor stocks and are generally risk-averse — like retirees. In your golden years, you might also prefer investment tools that can supplement your retirement income without requiring you to put in extra effort. ETFs are a perfect fit, as they offer a passive way to own a basket of diversified stocks, and can be easily traded on stock exchanges.

Depending on your risk/reward profiles and investing preferences, you can choose from a wide range of ETFs.

For retired investors, our contributors believe that three top ETFs to go for are iShares Core Total USD Bond Market ETF (NYSEMKT:IUSB), Vanguard High Dividend Yield ETF (NYSEMKT:VYM), and Vanguard S&P 500 ETF (NYSEMKT:VOO). Here’s why.

Boost your income with this high-yield dividend ETF

Neha Chamaria (Vanguard High Dividend Yield ETF): Dividend stocks are a great way to supplement retirement income, which is why my ETF pick for retirees also revolves around dividends. Among the several dividend ETFs, I believe Vanguard High Yield ETF, which comprises more than 400 high-yield dividend stocks and tracks the FTSE High Dividend Yield Index, deserves attention.

A jar of coins with
Retirees can supplement their income with ETFs. Image source: Getty Images.

There are several reasons why I believe this ETF is particularly well suited for retirees. For starters, more than 80% of its portfolio comprises large-cap stocks, eliminating much of the volatility and risk associated with small- or mid-cap stocks.

Second, the ETF has near-equal weightage — roughly 13% to 15% each — in several key industries including consumer goods, technology, financials, healthcare, and industrials, which means it offers investors well-balanced exposure.

Third, no single stock has more than mid-single-digit weightage — Microsoft, currently the ETF’s largest holding, comprises only about 5.5% of its total funds. Stocks like ExxonMobil, Johnson & Johnson, and JPMorgan Chase make up between 3% and 4% each.

Fourth, and most importantly, the ETF has a minuscule expense ratio of 0.08%, which means you’re hardly paying anything extra to own the ETF. For retirees, every dollar saved counts.

Given its focus on large-cap high yields, low cost, and strong historical performance — the ETF has generated 96% in total returns over the past five decades — I believe the Vanguard High Dividend Yield ETF…

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