Baby Boomers: 3 Vanguard ETFs for Passive Income and Growth in Your Golden Years

If you’re thinking of retirement, nearing retirement, or you’re already there, one of the last things you want to worry about is money.

So, why not have your money make you money?

One of the best ways to do that is by investing in passive income and growth, which we can do with Vanguard ETFs (exchange-traded funds). These funds offer broad diversification and can help lower overall risk compared to holding individual securities. Several income-generating Vanguard ETFs are built with retirees and near-retirees squarely in mind.

Here are three worth a close look.

Vanguard International High Dividend Yield Fund ETF

Vanguard International High Dividend Yield Index Fund ETF (NASDAQ:VYMI) has become a more attractive proposition for cost-conscious retirees since Vanguard slashed its expense ratio from 0.17% to 0.07% in early 2026, part of the firm’s largest fee-cut round ever. That reduction, which applied to 84 fund share classes across 53 funds, is estimated to save investors roughly $250 million annually. The ETF pays a quarterly dividend and offers exposure to international stocks with above-average dividend yields. Top holdings include Shell, Toyota, Novartis, and Royal Bank of Canada, among more than 1,000 names spread across developed and emerging markets outside the United States.

Because dividends are passed through from a large and diverse pool of international stocks, each with different payout schedules, the payment amounts do shift quarter to quarter. Based on recent distributions, VYMI carries a trailing yield of roughly 3.4%. That still compares favorably to what most savings accounts offer, and the fund’s broad diversification adds a layer of stability that individual stocks simply cannot match.

VYMI launched in February 2016 at around $36.50 per share. It now trades near $98, having climbed sharply from an April pullback to the low $60s. Morningstar rates the fund four out of five stars and notes that since its inception through October 2025, it beat its benchmark by 60 basis points annualized while capturing 100% of the index’s upside and only 96% of its downside.

Vanguard Energy Index Fund ETF

With an expense ratio of 0.09% and a quarterly dividend, the Vanguard Energy Index Fund ETF (NYSEARCA:VDE) tracks the returns of U.S. energy sector stocks. The fund holds 112 positions and has grown to roughly $11.8 billion in assets, up significantly from earlier in 2025, as energy stocks have rebounded strongly. Its trailing yield sits near 2.4%.

Exxon Mobil is the dominant holding at approximately 21% of the portfolio, followed by Chevron at about 14% and ConocoPhillips at nearly 6%. The fund’s top-ten list also includes Williams Companies, Valero Energy, Marathon Petroleum, EOG Resources, SLB, Phillips 66, and Baker Hughes, giving investors broad exposure to upstream, midstream, and downstream energy operations in a single low-cost vehicle.

The Trump administration’s stance on oil and gas production, including efforts to reduce regulatory burdens on energy producers while pausing offshore wind initiatives, continues to frame the policy backdrop for energy equities. At the same time, energy stocks carry commodity-price risk, and oil markets remain sensitive to geopolitical developments and shifts in global demand.

Since going public in October 2004 at around $30.52, VDE has climbed to roughly $161 today, a gain of more than 400% over two decades. Investors who collect the quarterly dividend along the way have compounded that return further.

Vanguard Dividend Appreciation ETF

The Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) tracks the S&P U.S. Dividend Growers Index, which targets U.S. companies that have raised their dividends for at least 10 consecutive years while excluding the highest-yielding names to avoid value traps. The fund carries one of the lowest expense ratios in its category at just 0.04%, a rate confirmed after Vanguard’s February 2025 fee reduction.

VIG now holds more than $108 billion in assets under management, reflecting strong investor demand over the past year. Its portfolio of around 340 stocks is anchored by large, stable businesses including Microsoft, Broadcom, JPMorgan, Apple, Visa, Eli Lilly, and Exxon Mobil. The fund’s trailing yield is approximately 1.5%, which may seem modest, but as contributor Rich Duprey has noted, its strength lies in dividend growth averaging about 10.7% annually over the past five years. That compounding effect, especially when dividends are reinvested, drives meaningful long-term returns for total-return investors.

VIG launched in April 2006 at around $34.57 per share. It now trades near $234, a gain of well over 500% since inception. Morningstar assigns the fund a Gold Medalist rating, citing its simple and repeatable approach, low costs, and portfolio of high-quality companies as a durable long-term edge. For Baby Boomers who want steady income today and the promise of growing income tomorrow, VIG has a long track record to point to.

Editor’s note: This article updates the expense ratio for VYMI from 0.17% to 0.07% following Vanguard’s early-2026 fee cut, refreshes current share prices for all three ETFs (VYMI near $98, VDE near $161, VIG near $234), corrects VDE’s yield to approximately 2.4% and its Exxon Mobil weighting to roughly 21%, updates VIG’s AUM to more than $108 billion and its expense ratio to 0.04%, and replaces stale references to an Israel-Iran oil-price catalyst with current context on the U.S. energy policy environment.