Baby Boomers Should Move to These 5 Safe Dividend ETFs Before September

While many Baby Boomers have enjoyed a long bull market over the past 35 years, income eventually becomes more critical than stock appreciation. The reason is straightforward: those who leave their careers to enjoy a well-deserved retirement lose the benefits of a regular salary and job perks like 401(k) matching and company-paid healthcare. Many Baby Boomers also use retirement to travel and claim the rewards they worked hard to earn. Choosing investments wisely is therefore imperative. At 24/7 Wall St., we constantly search for the best ideas for Baby Boomers and retirees. This time, we set out to find the five best and safest dividend exchange-traded funds (ETFs).

September is historically the weakest month of the year for U.S. stocks, and this year investors face a market that has climbed steadily since the AI and data center trade took off in November 2022 with the introduction of OpenAI’s ChatGPT, which became the fastest-growing software application, garnering over a million users in just five days. Recently, it was reported that asset managers and hedge funds built the largest Nasdaq Futures short position in history. Institutions do not build that kind of position because they expect stocks to keep rising.

We searched our 24/7 Wall St. dividend ETF database for the safest and best funds for Baby Boomers seeking to generate passive income. We focused on funds that offer genuine security alongside dependable income. These dividend-focused ETFs are particularly well-suited for seniors because they address the core financial needs of retirement: generating reliable income while preserving capital. Unlike momentum growth stocks, which can be volatile and provide no regular cash flow, these ETFs deliver quarterly dividend payments that can supplement Social Security and pension income, helping retirees cover living expenses without selling shares during market downturns. They also offer modest growth potential to keep pace with inflation, something high-yield savings accounts and certificates of deposit (CDs) cannot offer.

Each of these well-run ETFs, managed by experienced professionals at top U.S. investment firms, emphasizes low volatility, strong financials, and broad diversification, all of which are critical for capital preservation in retirement. Yields range from roughly 1.9% to 3.0%, substantially higher than the S&P 500’s current yield of approximately 1.1%. All carry low expense ratios, helping you keep more of your returns.

1. Schwab U.S. Dividend Equity ETF

This top-rated fund has become extremely popular among retirees, as it screens for high-quality dividend stocks with strong financials, including cash flow. Paying a solid 3.0% dividend yield with a very low expense ratio of just 0.06%, Schwab U.S. Dividend Equity ETF (NYSEArca: SCHD) checks all the boxes for income-focused retirees. The fund tracks the Dow Jones U.S. Dividend 100 Index and is heavily concentrated in defensive sectors like energy, consumer staples, and healthcare, which tend to hold their value during market downturns. SCHD has grown into one of the largest dividend ETFs in the country, now managing approximately $112 billion in assets, and it completed a 3-for-1 share split in October 2024 that made shares more accessible to individual investors.

To pursue its goal, the fund generally invests in index stocks. The index measures the performance of high-dividend-yielding U.S. companies with a record of consistently paying dividends, selected for fundamental strength relative to peers based on financial ratios. The fund will invest at least 90% of its net assets in these stocks.

2. Vanguard High Dividend Yield ETF

Known for Vanguard’s characteristically low fees, Vanguard High Dividend Yield ETF (NYSEArca: VYM) carries an expense ratio of just 0.06% and stands out for its excellent diversification across more than 600 holdings. This ETF provides broad exposure to dividend-paying stocks with a solid sector balance, making it a stable choice for retirees seeking income. Its current yield of approximately 2.3% and ultra-low fee structure appeal to conservative seniors who want dependable income alongside modest growth to keep pace with inflation.

The fund manager uses an indexing approach designed to track the FTSE High Dividend Yield Index, an index of common stocks from companies that generally pay higher-than-average dividends. The adviser seeks to replicate the target index by investing all, or substantially all, of the fund’s assets in the index’s stocks, holding each stock in approximately the same proportion as its index weighting.

3. ProShares S&P 500 Dividend Aristocrats ETF

This fund yields approximately 2.1% and has averaged a beta of 0.77, making it a reasonably defensive option for risk-averse retirees. ProShares S&P 500 Dividend Aristocrats ETF (NYSEArca: NOBL) invests in stocks that have consistently increased dividends for at least 25 consecutive years, demonstrating exceptional financial strength and reliability. The expense ratio is 0.35%. Investors seeking defensive companies with a long record of rewarding shareholders are drawn to the Dividend Aristocrats for good reason. The 69 companies that made the 2026 S&P 500 Dividend Aristocrats list have raised their dividends every single year for a quarter century. Membership carries additional requirements as well:

• Companies must be worth at least $3 billion for each quarterly rebalancing.
• Their average daily volume must be at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.
• They must be a member of the S&P 500.

The fund invests in financial instruments that ProShare Advisors believes, in combination, should track the index’s performance. The index measures the performance of S&P 500 companies that have consistently increased dividends for at least 25 years. Under normal circumstances, it invests at least 80% of its total assets in index components or instruments with similar economic characteristics. The equal-weighting methodology also ensures no single sector dominates the portfolio, capping any one sector at 30%.

4. iShares Core Dividend Growth ETF

iShares Core Dividend Growth ETF (NYSEArca: DGRO) suits retirees and income-seeking investors who prioritize growth over maximum current yield. The fund focuses on financially healthy companies that have raised dividends over time, providing resilience during market downturns. With a current yield of approximately 1.9% and a tiny 0.08% expense ratio, DGRO is an excellent option for ultra-conservative seniors seeking modest growth and income that comfortably exceeds typical bank savings rates. The fund also screens out companies paying more than 75% of their earnings as dividends, a guardrail that targets more sustainable payers.

The fund generally will invest at least 80% of its assets in the component securities of its underlying index and in investments with economic characteristics substantially identical to those of its underlying index. The underlying index is a subset of the Morningstar U.S. Market Index, a broad market index that represents approximately 97% of the market capitalization of publicly traded U.S. stocks.

5. State Street SPDR S&P Dividend ETF

This top fund, run by one of the industry’s leading asset managers, invests in high-yield stocks that have consistently increased dividends for at least 20 consecutive years, giving retirees a proven track record of reliability. State Street SPDR S&P Dividend ETF (NYSEArca: SDY) screens for stocks with consistent capital growth, holds more than $21 billion in net assets, and charges a competitive 0.35% expense ratio. Core holdings are concentrated in the industrials, utilities, and financial sectors. The fund currently yields approximately 2.4%, and its yield-weighted construction naturally tilts toward the highest-paying names in the eligible universe.

The fund generally invests substantially all, but at least 80%, of its total assets in the securities comprising the index. The index is designed to measure the performance of the highest-dividend-yielding S&P Composite 1500 Index constituents that have followed a managed-dividends policy of consistently increasing dividends for at least 20 consecutive years.

Editor’s note: This article was updated to reflect current dividend yields for all five ETFs, a revised S&P 500 yield of approximately 1.1% (down from the previously cited 1.3%), an increased SDY net asset figure of more than $21 billion, SCHD’s expanded AUM of approximately $112 billion, and a correction to NOBL’s exchange listing from Nasdaq to NYSE Arca.

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