For retirees, one of the most popular options in Vanguard’s lineup has long been the Vanguard Wellesley Income Fund Investor Shares (ticker: VWINX). It has a long track record, delivering a 9.2% annualized return since July 1970 with a balanced allocation of one-third stocks and two-thirds bonds.
The fund uses an active approach, focusing on large-cap value stocks with growing dividends on the equity side and intermediate-term corporate bonds on the fixed-income side. After its 0.22% expense ratio, it currently offers a 3.7% 30-day SEC yield, making it a well-rounded, all-in-one solution.
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However, VWINX is not a perfect fit for everyone. Its expense ratio is higher than what can be achieved with low-cost index funds, and as a mutual fund, it requires a $3,000 minimum investment. The lower-cost Admiral Shares version charges 0.15%, but requires a $50,000 minimum.
These constraints can limit accessibility, especially for investors who prefer flexibility or are building positions gradually. Retirees who want more control can replicate a similar strategy on their own.
“For retirees, building a portfolio often means balancing reliable income with the potential to keep pace with inflation,” says Kathy Kellert, head of index equity product at Vanguard. “Some retirees also look to defensive equity sectors to help manage risk, particularly areas with more stable demand across cycles.”
On the equity side, that often means focusing on dividend-paying stocks, either through high-yield strategies or funds with a track record of dividend growth. On the fixed-income side, it may involve taking measured credit risk, such as holding corporate bonds for higher income, while understanding the trade-offs in terms of taxes and default risk.
A practical way to implement this approach is through Vanguard’s exchange-traded fund, or ETF, selection. Unlike mutual funds, ETFs have no minimum investment beyond the price of a single share. They also trade throughout the day like stocks, with a bid and ask price, whereas mutual funds are priced once per day at their net asset value after the market closes.
Here are seven of the best Vanguard ETFs for retirees in 2026:
| ETF | Expense Ratio |
| Vanguard Dividend Appreciation ETF (VIG) | 0.04% |
| Vanguard High Dividend Yield ETF (VYM) | 0.04% |
| Vanguard Wellington Dividend Growth Active ETF (VDIG) | 0.40% |
| Vanguard U.S. Minimum Volatility ETF (VFMV) | 0.13% |
| Vanguard Utilities ETF (VPU) | 0.09% |
| Vanguard Short-Term Inflation-Protected Securities ETF (VTIP) | 0.03% |
| Vanguard Short-Term Tax-Exempt Bond ETF (VTES) | 0.05% |
Vanguard Dividend Appreciation ETF (VIG)
VIG could serve as a suitable core equity holding for retirees. Instead of tracking a broad benchmark like the S&P 500, it follows the S&P U.S. Dividend Growers Index. This index requires at least 10 years of consecutive dividend growth and excludes the highest-yielding quartile to avoid yield traps. While the ETF is still market cap-weighted, it applies a 4% cap on individual holdings to limit concentration.
VIG’s 1.6% 30-day SEC yield is not the highest, but it still exceeds that of the broader market and tends to be more tax-efficient since it excludes real estate investment trusts, or REITs. The focus here is on growing income over time rather than maximizing current yield. With dividends reinvested, the ETF has delivered a 10-year annualized return of 13.1%. It is also very affordable, with a 0.04% expense ratio that Vanguard recently lowered.
Vanguard High Dividend Yield ETF (VYM)
If VIG’s 1.6% yield is too low, VYM may be a better fit for income-focused investors. After the same 0.04% expense ratio, VYM currently pays a 2.3% 30-day SEC yield. It follows a different approach by tracking the FTSE High Dividend Yield Index. This index excludes REITs, removes companies that do not pay dividends and ranks the remaining stocks by forward yield before weighting them by market cap.
Unlike VIG, which focuses on dividend growth and quality, VYM leans more toward higher-yielding blue chips. This gives the portfolio a stronger tilt toward value-oriented sectors like financials and industrials. The trade-off is less emphasis on consistent dividend growth and potentially more exposure to slower-growing companies. Over the last 10 years, VYM has delivered an 11.9% annualized total return.
Vanguard Wellington Dividend Growth Active ETF (VDIG)
“VDIG focuses on dividend-paying, large-cap companies, seeking a growing stream of income over time along with long-term capital appreciation, which may appeal to investors looking for a more flexible dividend strategy,” says Ryan Barksdale, head of active equity product at Vanguard. While pricier than VIG with a 0.4% expense ratio, it remains reasonable for an actively managed equity ETF.
While VIG holds more than 300 stocks, VDIG owns just 34 companies, reflecting a high-conviction active approach. Despite the smaller portfolio, it maintains strong quality metrics, including an average earnings growth rate of 16.8% and return on equity of 36.1%. However, the higher 0.4% expense ratio results in a lower 30-day SEC yield of just 1%, making VDIG more total-return focused.
Vanguard U.S. Minimum Volatility ETF (VFMV)
“VFMV rounds out the mix by focusing on stocks that have historically experienced lower volatility, which can be valuable for retirees as they think about managing equity risk over time,” Barksdale says. Retirees can use VFMV as a core equity holding or as a satellite position alongside an S&P 500 index fund. This allows investors to dampen overall portfolio swings while still maintaining equity exposure.
Unlike many low-volatility strategies, VFMF does not lean heavily into traditionally defensive sectors like utilities, health care or consumer staples. Instead, it follows a sector-neutral approach similar to the S&P 500, with meaningful exposure to high-growth segments like technology, financials and consumer discretionary. The ETF charges a 0.13% expense ratio and offers a 1.6% 30-day SEC yield.
Vanguard Utilities ETF (VPU)
“Funds like the Vanguard Health Care ETF (VHT), the Vanguard Utilities ETF (VPU) and the Vanguard Consumer Staples ETF (VDC) provide targeted exposure to sectors that historically have been less sensitive to economic swings,” says Rebecca Venter, senior fixed-income product manager at Vanguard. “While they are not immune to market risk, these sectors can play a role in helping investors balance growth needs with an emphasis on resilience over time.”
VPU reflects that defensive profile with a five-year monthly beta of 0.68, making it less volatile than the S&P 500. Utilities have long been considered “widows and orphans” stocks due to their stable income and lower volatility. The ETF holds 67 U.S. companies across electric, gas, renewable and water utilities in a market cap-weighted portfolio. VPU pays a 2.5% 30-day SEC yield and charges a 0.09% expense ratio.
Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)
Even within fixed income, risks remain. Bond prices can fall when interest rates rise, and over time, inflation can erode the real value of both income and principal. One way to address that risk is through Treasury inflation-protected securities, or TIPS, which adjust with inflation. VTIP focuses on short-term TIPS, helping limit interest-rate sensitivity while still offering decent inflation protection.
“If a retiree’s asset allocation only holds 30% equities or less, then adding an ETF like VTIP can help protect against unexpected inflation and preserve purchasing power,” says Nilay Gandhi, senior wealth advisor at Vanguard. The current 0.6% 30-day SEC yield may seem low, but Vanguard cautions that it does not reflect potential inflation adjustments. VTIP charges a low 0.03% expense ratio.
Vanguard Short-Term Tax-Exempt Bond ETF (VTES)
In addition to interest rate and inflation risk, many bond funds face significant drag from taxes. While Treasury income is generally exempt from state taxes, interest from corporate bonds is typically taxed at both federal and state levels. That can reduce after-tax returns, especially for retirees in higher income brackets. One way to address this is through municipal bond ETFs that generate tax-exempt income.
“A potential solution is an ETF which provides broad U.S. municipal bond exposure suitable for retirees in a higher marginal tax bracket,” Gandhi says. VTES is one such option, tracking the S&P 0-7 Year National AMT-Free Municipal Bond Index. Its 2.6% 30-day SEC yield is exempt from federal income tax and the alternative minimum tax. With an average duration of just 2.6 years, it is also resilient against rising rates.
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7 of the Best Vanguard ETFs for Retirees originally appeared on usnews.com
Update 05/05/26: This story was published at an earlier date and has been updated with new information.
