Your Portfolio Is Not Ready for Retirement: 3 ETFs to Secure Your Financial Future

Life insurance provider John Hancock just released its Longevity Preparedness Index, a survey to measure U.S. adults’ ability to live well in older age. It reveals a sobering reality: Americans score just 60 out of 100 in readiness for longer lifespans, with finances a glaring weak spot.

As life expectancy rises — potentially doubling the 65+ population to 82 million by 2050 — the survey found many face the risk of outliving their savings. This underscores the need for robust retirement portfolios that can sustain decades of withdrawals while combating inflation.

Exchange-traded funds (ETFs) are an ideal solution for investors seeking to build such a nest egg. They offer low costs, broad diversification, and flexibility to balance growth and income, ensuring you don’t have to scrimp in your later years. Unlike individual stocks, ETFs spread risk across many assets, and their low fees preserve wealth over time.

The three ETFs below are excellent choices for your retirement portfolio as they are tailored for both growth and income. While they are primed to meet this need, they aren’t tailored to your specific risk tolerance, age, or finances, so consulting with a financial advisor to align them with your specific situation is an important first step.

The Vanguard Total Stock Market ETF (NYSEARCA:VTI) is a powerhouse for retirees needing growth to outpace inflation over a 20- to 30-year retirement. Tracking the CRSP US Total Market Index, VTI holds roughly 4,000 U.S. stocks across large, mid, and small caps, from tech giants like Apple (NASDAQ:AAPL) to smaller firms. This broad exposure has delivered historical annualized returns exceeding 10%, driven by the U.S. market’s long-term upward trend. With an expense ratio of just 0.03%, VTI ensures minimal fees erode your returns, maximizing compounding over decades.

For retirees, this ETF provides the growth needed to maintain purchasing power as costs rise. While it lacks significant dividends (the yield is 1.1%), its capital appreciation potential makes it a cornerstone for those who can tolerate equity market volatility. Allocate a portion of your portfolio here to ensure your savings grow faster than inflation.

The Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD) is the second foundational ETF to buy for your retirement portfolio. It strikes a balance between income and growth, critical for retirees facing extended lifespans.

Tracking the Dow Jones U.S. Dividend 100 Index, SCHD invests in 100 high-quality companies with consistent dividend growth, like Chevron (NYSE:CVX) and Home Depot (NYSE:HD). Its 3.9% yield provides reliable cash flow for living expenses, while its focus on firms with strong fundamentals has yielded 12.4% annualized returns since inception in 2011. With a low 0.06% expense ratio, SCHD keeps costs down, preserving your nest egg.

This ETF suits retirees needing income now but also growth to stretch savings over decades. Its diversified holdings across sectors like energy and consumer staples reduce risk compared to single-stock dividend strategies, making it a dependable choice for financial longevity.

The JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI) is the third leg of the triad, designed for retirees prioritizing consistent income without sacrificing growth. JEPI invests in S&P 500 stocks while using an options overlay strategy to generate monthly payouts, delivering a hefty 8.4% yield. This high income stream is ideal for covering retirement expenses, from healthcare to travel, without depleting principal.

Since its 2020 launch, JEPI has achieved 11.6% total returns with lower volatility than pure equity ETFs, thanks to its options approach, which cushions market downturns. With a 0.35% expense ratio, it’s slightly pricier but justified by its income generation.

Holding blue-chip stocks like Microsoft (NASDAQ:MSFT), JEPI offers growth potential to combat inflation while providing cash flow stability. It’s a strong pick for retirees seeking to avoid scrimping in their later years.