7 Dividend ETFs for Retirement Investors

Continuing on the topic of appropriate investments for retirees, here's another recent list of recommendations from U.S. News Invested.  

JANUARY 11, 2023 Invested Advice, rankings and stock market news for investors.

Good morning, investors. Markets end in the green, and investors applaud Coinbase's restructuring plan. Highlights of today's newsletter include our market insights plus these new articles: 7 Dividend ETFs for Retirement Investors 7 Best Tech ETFs to Buy for 2023 ESG Investing Trends for 2023 TODAY'S FEATURED STORY 7 Dividend ETFs for Retirement Investors Younger investors may target overall portfolio growth, but investors in their golden years have a very different set of objectives. For retirees, ensuring preservation of capital is a high priority. A sudden decline in portfolio value can severely jeopardize retirement plans. Retirees must also ensure that the portfolio generates sufficient income to meet their living expenses. While selling shares to fund withdrawals is possible, doing so can be psychologically difficult, especially during a market downturn. Thus, an alternative is to fund retirement income streams via high-dividend-paying exchange-traded funds, or ETFs. Compared to individual dividend stocks, dividend ETFs offer greater diversification. These ETFs can supplement or replace the usual equity allocation in a retiree's portfolio. Here are the seven best dividend ETFs to buy for retirement investors. Vanguard High Dividend Yield ETF (ticker: VYM). A popular dividend ETF among passive investors is VYM. This ETF tracks the FTSE High Dividend Yield Index, which holds a portfolio of 442 U.S. large-cap stocks forecasted to have above-average dividend yields. Within equities, VYM falls into the large-cap value bucket. Compared to the total U.S. stock market, VYM is overweight in sectors such as energy, health care and consumer staples, with notable top holdings including Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), Procter & Gamble Co. (PG) and Johnson & Johnson (JNJ). Like many of Vanguard's ETFs, VYM charges a low expense ratio of 0.06%. The ETF currently pays a 30-day SEC yield of 3%. Schwab U.S. Dividend Equity ETF (SCHD). There's more than one way to select dividend ETFs. While some dividend ETFs like VYM screen for high yields, others screen for different factors. A great example is SCHD, which tracks the Dow Jones U.S. Dividend 100 Index. This ETF holds a total of 103 U.S. stocks that possess quality fundamentals and an established history of dividend payments. Top holdings include Verizon Communications Inc. (VZ), Broadcom Inc. (AVGO), Merck & Co. Inc. (MRK), Pfizer Inc. (PFE) and Home Depot Inc. (HD). With distributions reinvested, SCHD only lost 3.3% in 2022 due to the robust nature of its holdings. The ETF pays a 30-day SEC yield of 3.3% and charges a 0.06% expense ratio. Click here to continue reading. 7 best dividend ETFs to buy for retirement investors: Vanguard High Dividend Yield ETF (VYM) Schwab U.S. Dividend Equity ETF (SCHD) Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) iShares International Select Dividend ETF (IDV) Global X Nasdaq 100 Covered Call ETF (QYLD) JPMorgan Equity Premium Income ETF (JEPI) Nationwide Nasdaq-100 Risk-Managed Income ETF (NUSI)