When retirement is on the horizon, generating more income is the name of the game, and investors are increasingly looking to dividend ETFs to fill this void. By investing in dividend funds, you allow the pros to cherry pick holdings for you so that you don’t have to spend your time researching a sea of individual dividend stocks. With thousands of equity ETFs to choose from, the task of narrowing down the field of those that pay steady dividends can be daunting. That’s why we’ve done some of the heavy lifting for you to offer you some options.
We’ve identified a trio of reliable monthly dividend ETFs for retirees to consider when looking to bolster their income streams. They include the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard High Dividend Yield ETF (VYM). These three funds offer plenty of diversification so that retirees aren’t putting all of their eggs into a single sector basket. They also provide a mix of monthly and quarterly distributions, meaning that the checks are likely to keep coming to bridge any gaps and make retirement income a bit more predictable.
If stock market performance in 2025 is any indication, then volatility won’t be going away any time soon. As a result, dividend income has become an increasingly important part of any investor’s portfolio, especially when retirement is near. According to a recent Gallup poll, more than half (60%) of investors worry about stock market volatility. These investors might be able to sleep better at night if they gain some exposure to dividend paying ETFs like the following three choices.
Tech Exposure: JEPQ
The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) pursues a strategy that is two-pronged: generate income while keeping the door open to capital appreciation. As a retiree, you get a chance for the best of both worlds, as long as your risk/reward appetite allows for it. The JEPQ ETF is a monthly dividend payer, ensuring that retirees will have cash on hand for certain bills when they need it. It generates this income from a combination of options premiums and stock dividends. You can think of this ETF as a proxy for the Nasdaq 100 index but without the roller coaster ride that is inherent with the tech-heavy index.
Just because you’re nearing retirement doesn’t mean you can’t have exposure to high-growth names. In fact, growth-oriented technology stocks are increasingly pivoting to a dividend paying model, paving the way for industry leaders like Nvidia (Nasdaq; NVDA), Microsoft (Nasdaq: MSFT) and Apple (Nasdaq: AAPL) to muscle their way into the JEPQ ETF as core holdings. In addition to technology, investors also gain exposure to steady performers like Walmart (NYSE: WMT), Costco Wholesale (Nasdaq: COST), Procter & Gamble (NYSE: PG), Coca-Cola (NYSE: KO) and Altria Group (NYSE: MO).
JEPQ’s trailing 12-month dividend yield is approximately 11.52%, while its 30-day SEC yield is closer to 9.5%. Since its launch in 2022, the ETF has delivered annualized returns of 14.56% (NAV), with historical calendar-year gains of approximately 36.3% and 25.0% in 2023 and 2024, respectively. Because of the options overlay, it might not keep pace with a roaring Nasdaq in bullish market cycles, but its strategy is designed to provide a smoother ride in choppier markets, which is better suited for retirees anyway.
JEPQ ETF assets hover at approximately $29.5 billion, while the expense ratio is 0.35%; while higher than average, the fee is fair considering the sophisticated strategy involving options. If you’re nearing retirement and looking to turn blue-chip growth into regular cash flow without stepping away from stocks, JEPQ is designed for that balance. If you had invested $10,000 into JEPQ in 2022 (fund inception), your holdings as of Aug. 31, 2025 would be nearly $16,000 with dividends and capital gains reinvested.
Schwab U.S. Dividend Equity ETF (SCHD)
If a passively managed fund is more your style, the Schwab U.S. Dividend Equity ETF (SCHD) might be the right fit. This fund’s strategy is to replicate the performance of the Dow Jones U.S. Dividend 100 Index, which targets U.S. high-yielding dividend stocks with solid fundamentals and consistent track records making distributions. With a total expense ratio of 0.060%, this ETF is cheaper to own compared with JEPQ due to its passively managed strategy that requires less expertise.
Unlike the JEPQ ETF, which makes monthly distributions, the SCHD ETF pays quarterly, giving you further opportunity to plan your retirement budget and fill in any gaps. Through SCHD, you add a good balance of diversification to your investment portfolio, with sector exposure to energy, consumer staples, healthcare, industrials and more. Top holdings include Texas Instruments (Nasdaq: TXN), Cisco Systems (Nasdaq: CSCO), ConocoPhillips (NYSE: COP), Chevron (NYSE: CVX) and pharma giant Merck (NYSE: MRK).
One of this ETF’s top holdings is also Coca-Cola (NYSE: KO). Not only is this one of Warren Buffett’s favorite stocks (and beverages), but it also earns the designation as a Dividend King. This means that Coca-Cola is an extremely reliable dividend payer that has raised its annually payout consistently for over 60 years. This proves the company’s priority to return value to shareholders, a policy that benefits investors with exposure to KO through ETFs like Schwab’s SCHD.
SCHD has a trailing yield of 3.67% and has delivered annualized returns of approximately 12.6% since inception. If you invested $10,000 into the SCHD ETF in 2015, your holding would have more than tripled to $32,126 as of 2025, assuming the reinvestment of dividends and capital appreciation. Even though SCHD has trailed the S&P 500 index’s returns since it was launched, you get what you signed up for: steady dividend income to help pad your retirement years with the potential for continued capital appreciation.
Low Cost: Vanguard High Dividend Yield ETF (VYM)
Vanguard is synonymous with low fees, and its High Dividend Yield ETF (VYM) is no exception. With an expense ratio of 0.06%, you get to pocket most of the income that comes your way. This Vanguard ETF seeks to mimic the performance of the FTSE High Dividend Yield Index, which, in turn, targets high-dividend yielding stocks. It gives investors exposure to stocks that are expected to deliver above-average dividend yields. Retirees can expect monthly dividend payments to supplement Social Security or other income streams.
For retirees, that tiny 0.06% fee means more of each check lands in your pocket. Keep it simple with the automated dividend reinvestment plan (DRIP) switch on while you’re still saving, then flip to cash in retirement to bankroll withdrawals. This ETF’s wide sector exposure, steady payouts and low cost make a compatible pairing for an IRA or taxable accounts like a standard brokerage account, for example.
If you are worried about taking on excessive risk with this ETF, you’ll be comforted to know that offers diversification through nearly 600 individual stocks. VYM is known for holding large-cap leaders like chip company Broadcom (Nasdaq: AVGO), financial institution JPMorgan (NYSE: JPM), energy giant Exxon Mobil (NYSE: XOM), pharma behemoth Johnson & Johnson (NYSE: JNJ) and big-box retailer Walmart (NYSE: WMT).
Since VYM was launched in 2006, the fund has generated solid returns on top of its trailing 2.5% dividend yield. Year to date in 2025, VYM is up 10.5% compared with the S&P 500’s 13% return over the same period. Over the past five years, VYM’s average annual return is roughly 14% while since inception the ETF’s annual returns are closer to 9%.
Diversified Portfolio
The stock market rally of 2025 has been impressive, but it has come with the cost of volatility, which can be a high price to pay when you’re settling into retirement. Dividend ETFs can be the antidote to market swings, offering investors cash distributions that they can collect or reinvest to grow their retirement nest egg even more. Dividend ETFs JEPQ, SCHD and VYM each offer their own charm depending on your personal retirement needs and goals.
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