3 Solid Dividend ETFs Retirees Can Buy in September and Hold Forever

By the time you reach retirement age, you realize that change is the one constant in life. Just because the market is performing well right now doesn’t mean it will keep growing. To hedge against loss, it’s a good idea to build a balanced portfolio that includes investments likely to weather market downturns.

While plenty of investments combine growth with relative security, this article focuses on dividend-paying ETFs. Because the focus is on safety, the ETFs included here prioritize sustainable income and capital preservation over sky-high yields. To be included, a fund must also hold high-quality assets, be sufficiently diversified to handle sudden market upheavals, and have a history of regular payouts.

It’s important to note that seeking safe havens comes with a trade-off. The underlying assets are chosen because the companies have a history of increasing regular dividends, having strong fundamentals, and having the potential for long-term growth. However, because they’re not as speculative or risky as some ETFs, you trade dramatic dividend spikes for well-vetted investments that can provide relative safety during turbulent markets.

Three ETFs worth consideration

Vanguard Dividend Appreciation ETF (VIG +0.02%)

• The focus: VIG targets companies with a history of dividend increases.
• Expense ratio: With an expense ratio of 0.04%, you’ll have more money to invest.
• Why it’s considered safe: VIG invests in high-quality companies known for both stable earnings and consistent dividend growth.
• Yield: Trailing 12-month dividend distribution (TTM) of 1.50% (as of Sept. 11).

Schwab U.S. Dividend Equity ETF (SCHD -0.48%)

• The focus: This fund focuses strictly on high-dividend-yielding U.S. stocks.
• Expense ratio: 0.06%
• Why it’s considered safe: SCHD targets companies with strong fundamentals and a strong history of paying dividends.
• Yield: TTM of 3.07% (as of Sept. 11).

Vanguard Total Stock Market ETF (VTI +0.35%)

• The focus: Provides broad exposure to the entire U.S. stock market.
• Expense ratio: 0.03%
• Why it’s considered safe: VTI is diversified across sectors and company sizes, which can reduce risk while still offering long-term growth potential.
• Yield: TTM of 1.04% (as of Sept. 11).

What these three dividend-paying ETFs have in common

While their focuses may differ, each of these funds has at least three things in common — factors that contribute to their reputation as havens for investors seeking safety and potential growth.

• Diversification: Each fund offers varying levels of exposure to different sectors, helping manage risk during market downturns.
• Income generation: Each can provide a steady income stream.
• Long-term growth potential: Because it’s not enough to just be safe, these ETFs also have the potential for capital appreciation.

By combining diversification with regular dividend payments, each of these funds appeals to conservative investors seeking to diversify their portfolios without taking on excessive risk. And if you’re a retiree looking for safety in uncertain times, they may appeal to you.