Three High-Yielding ETFs Perfect for Retirement Income Planning

For retirees seeking steady income without excessive market volatility, dividend-focused exchange-traded funds offer a compelling solution. Unlike individual dividend stocks—which carry the risk of sudden payout cuts—ETFs distribute this risk across dozens or hundreds of holdings. Here are three yielding options worth considering.

The Income Comparison

When evaluating high-yielding dividend vehicles, three standouts emerge. The Schwab U.S. Dividend Equity ETF (SCHD) offers a robust 3.7% yield, more than triple the average S&P 500 dividend. The iShares Core Dividend Growth ETF (DGRO) provides approximately 2% in annual distributions, while the ProShares S&P 500 Dividend Aristocrats ETF (NOBL) yields just over 2%. All three beat the typical S&P 500 stock yield of 1.2%.

Why Stability Matters for Retirees

Beyond raw yield numbers, volatility is crucial. Beta measures how much a fund swings compared to the broader market. SCHD’s beta sits below 0.7, DGRO trails at 0.75, and NOBL averages 0.77—all indicating significantly lower risk than general market indices. This stability comes partly from sector positioning: SCHD keeps tech exposure minimal at just 8%, instead weighting toward defensive sectors like energy and consumer staples.

Deep Dive: Each Fund’s Unique Approach

Schwab U.S. Dividend Equity ETF takes the most conservative path. With 102 holdings and a modest price-to-earnings multiple under 17, it charges just 0.06% annually. The fund has climbed modestly this year, up 1%. Its strength lies in consistency—not chasing growth, but delivering steady dividend collection.

iShares Core Dividend Growth ETF balances income with appreciation potential. Housing around 400 stocks, it includes large-cap names like Johnson & Johnson and ExxonMobil, plus growth-oriented tech giants Apple and Microsoft. Though these tech positions show lower yields individually, they’ve expanded payouts reliably over years. The fund’s 13% year-to-date gain demonstrates this growth potential. Its 0.08% expense ratio keeps costs minimal.

ProShares S&P 500 Dividend Aristocrats ETF focuses on companies with 25+ consecutive years of dividend increases—a durability track record. Its portfolio contains 69 stocks with just 3% in tech, ensuring broad diversification and limiting concentration risk. The trade-off is a higher 0.35% expense ratio, though still reasonable. Year-to-date performance shows approximately 4% gains.

The Risk Reduction Advantage

The core advantage of dividend ETFs lies in portfolio construction. Rather than betting your retirement income on a single company’s dividend policy, you’re spreading that dependence across dozens or hundreds of firms. If one cuts its payout, the fund’s overall yield barely budges. This structural safety makes these yielding vehicles particularly suitable for risk-averse retirees prioritizing income preservation over aggressive growth.