5 Best Dividend ETFs for Secure Retirement Income

The fundamental goal of retirement investing undergoes a significant transformation. The primary objective is no longer aggressive capital growth but rather the preservation of accumulated wealth and the generation of a reliable income stream. This necessitates a move away from high-risk strategies toward more conservative, income-focused assets. Sensible retirement investing aims to achieve returns that outpace inflation without exposing the portfolio to undue risk. Given the substantial market gains over the past three years—which history suggests can be precursors to corrections—retirees are wise to err on the side of caution. Dividend ETFs represent a cornerstone of this defensive strategy, designed to provide regular income regardless of broader market conditions.

The Amplify CWP Enhanced Dividend Income ETF (DIVO) employs an actively-managed, dual-income strategy that sets it apart. The fund invests at least 80% of its net assets in dividend-paying stocks from the S&P 500 and overlays this portfolio with a covered call writing strategy. This approach is more stable than ETFs that rely almost exclusively on options premiums for income. Investors benefit from exposure to equity upside while experiencing lower volatility than the broader market, as evidenced by DIVO’s beta of 0.72—significantly less volatile than the market baseline of 1.0.

For retirees, DIVO offers a compelling package: a trailing 12-month yield of 4.51% paid monthly, which provides convenient cash flow for living expenses. The fund’s expense ratio is 0.56%, or $56 annually per $10,000 invested, a reasonable cost for its active management and sophisticated strategy.

For investors seeking global diversification without the typical associated risks, the Franklin International Low Volatility High Dividend Index ETF (LVHI) is a standout option. LVHI tracks the QS International Low Volatility High Dividend Hedged Index, dedicating at least 80% of its assets to this benchmark. The fund’s methodology focuses on international dividend-paying stocks while specifically screening for low volatility.

A key feature of LVHI is its use of currency hedging to mitigate exposure to fluctuations between the U.S. dollar and other currencies. This protects investors from potential losses if international markets decline relative to the dollar, making the fund’s 5.09% yield more predictable. With an expense ratio of 0.40% ($40 per $10,000), LVHI offers cost-effective access to a hedged international income portfolio.

Not all retirement income needs to come from the stock market. The iShares 20+ Year Treasury Bond ETF (TLT) provides exposure to long-dated U.S. Treasury bonds, offering a high degree of safety and a compelling opportunity in the current interest rate environment. While TLT has declined approximately 46.2% over the past five years due to aggressive Federal Reserve rate hikes, this has created a potential inflection point.

With the Fed recently initiating rate cuts and more expected, TLT, currently trading near $88.9, is positioned for significant price appreciation as bond prices rise when yields fall. Investors can capture this potential upside while collecting a monthly dividend yield of 4.34%. The fund’s ultra-low expense ratio of 0.15% ($15 per $10,000) makes it an efficient vehicle for this interest-rate-sensitive play.

The Janus Henderson AAA CLO ETF (JAAA) offers income from the highest-rated segment of the credit market. The fund invests primarily in AAA-rated collateralized loan obligations (CLOs), the top credit rating available. These instruments are considered highly stable and are unlikely to default even during economic downturns, ensuring the continuity of dividend payments. JAAA yields an impressive 5.63%, paid monthly, with a low expense ratio of 0.20% ($20 per $10,000).

For those willing to accept slightly more risk for tech exposure and a substantially higher yield, the NEOS Nasdaq-100 High Income ETF (QQQI) is a unique option. QQQI buys stocks from the Nasdaq-100 Index and employs a covered call strategy on the NDX index to generate premium income. This strategy currently produces a remarkable 13.42% yield, paid monthly. While the fund may struggle in a sharp market downturn, it uses call spreads to allow for some participation in upward moves. Its expense ratio is 0.68% ($68 per $10,000), the highest of the group, reflecting its complex options strategy.

Together, these five ETFs—DIVO, LVHI, TLT, JAAA, and QQQI—provide a toolkit for constructing a resilient retirement income portfolio. They span different asset classes, from U.S. and international equities to government bonds and high-grade credit, offering diversification benefits. A common thread is their focus on monthly income distributions, which align perfectly with the cash flow needs of retirees.

Each fund presents a unique risk/return profile, from the stability of AAA-rated CLOs in JAAA to the interest-rate sensitivity of TLT and the high-octane yield of QQQI. By combining these vehicles, investors can tailor an income strategy that emphasizes capital preservation while delivering attractive, reliable yields to fund their retirement years, all while keeping expense ratios manageable.