5 Dividend ETFs Built for a Lifetime of Retirement Income

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One of the keys to a comfortable retirement is finding a steady and reliable stream of passive income. But Social Security benefits and a 401(k) portfolio may not be enough, especially in the face of stubborn inflation and economic uncertainty.

So many investors turn to dividend ETFs. These are professionally managed funds that invest in a variety of dividend-paying stocks. This offers instant diversification as well as a steady stream of income. But with so many ETFs out there, it can be difficult to choose a handful of winners.

So we narrowed it down to five dividend ETFs that could build a powerhouse retirement portfolio providing stability, growth and lifetime income. So let’s dig in.

Schwab U.S. Dividend Equity ETF (SCHD)

The Schwab U.S. Dividend Equity ETF (SCHD) invests in quality companies in the Dow Jones U.S. Dividend 100 Index. Fund managers screen these companies for strong financials and sustainability of dividends. This could provide your portfolio with a certain degree of stability and safety. Its top holdings include companies like Cisco (NASDAQ:CSCO), PepsiCo (NASDAQ:PEP) and Home Depot.

SCHD also stands out for its ultra low fees or expense ratio of 0.06%. And it has an impressive yield of 3.85%. SCHD launched in 2011 and is run by Charles Schwab, one of the largest brokerage firms in the country. And with many of the so-called Dividend Aristocrats under its belt, it remains a very popular dividend ETF among investors.

Vanguard High Dividend Yield ETF (VYM)

You can combine the stability of SCHD with the high payments of the Vanguard High Dividend Yield ETF (VYM). This fund shines for diversification and performance. It invests in more than 500 companies that are paying above average dividend yields. Run by Vanguard, which is known for its low fees, VYM also carries a low expense ratio of 0.06%. 

The VYM has net assets of more than $81 billion. Its main holdings are in the financial, consumer discretionary and basic materials sectors. Among its top holdings are Broadcom (NASDAQ:AVGO) and JPMorgan Chase (NYSE:JPM).

Vanguard Dividend Appreciation ETF (VIG)

The Vanguard Dividend Appreciation ETF (VIG) invests in companies with a history of increasing dividends. It tracks the S&P U.S. Dividend Growers Index. This could offer growth and capital appreciation in your portfolio.

Its main holdings are in the financials, consumer discretionary and information technology sectors. Its top holdings include Broadcom (NASDAQ:AVGO), JPMorgan Chase (NYSE:JPM) and Microsoft (NASDAQ:MSFT). It holds net assets of more than $115 billion. And it also stands out for its low expense ratio of just 0.05%, beating both SCHD and VYM when it comes to costs.

iShares Core High Dividend ETF (HDV)

You can add another layer of stability with the iShares Core High Dividend ETF (HDV). Like SCHD, HDV invests in high quality companies screened for financial health. But it also seeks out companies that pay large dividends. And it does this with a low expense ratio of 0.08%.  It has net assets of about $11.42 billion. And it pulls a high yield of about 3.33%.

HDV’s top holdings include Exxon Mobil (NYSE:XOM), Johnson & Johnson (NYSE:JNJ) and Chevron (NYSE:CVX).

ProShares S&P 500 Dividend Aristocrats ETF (NOBL)

The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) stands out as the only ETF that focuses on the Dividend Aristocrats of the S&P 500. It aims to invest in quality companies with a history of increasing dividends in the past 25 years. It also screens stocks for strong financials, low volatility and a history of profitability and growth.

Its top holdings are C.H. Robinson Worldwide Inc. (NASDAQ:CHRW), AbbVie Inc. (NYSE:ABBV) and Lowe’s Cos. Inc.

The NOBL has a yield of around 2.52%. Additionally, it has net assets of $11.43 billion. And it carries an expense ratio of 0.35%.

The bottom line

Inflation and other economic factors can eat away at your retirement savings. So to combat these trends, many investors resort to dividend-paying ETFs. These could offer diversity, growth and a steady stream of income that can last well into retirement. These five funds we’ve selected stand out for their high yields, low fees, reputable performance and more. Combined in your portfolio, they can deliver stability, growth and lifetime income. But they’re not your only options. Explore these funds closely to see if they are right for you based on your risk tolerance, time horizon and overall investment goals.

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