These 3 Dividend ETFs Are a Retiree's Best Friend
Once you retire, your income from work stops, but many of your expenses still continue. That makes dividend stocks a tempting prospective investment for retirees who are looking to balance current income with long term growth to cover their costs both today and well into the future.
The challenge with dividends, though, is that they are never guaranteed payments. When a company cuts its dividend, its share price often falls, thus evaporating both the income and a good portion of the capital that generated it. Investing in ETFs instead of individual stocks can help buffer that risk, as not every company will cut its dividend simultaneously. With that in mind, these three dividend ETFs could be a retiree's best friend in the quest to find some source of income once work ends.
The Vanguard Dividend Appreciation Index ETF (NYSEMKT: VIG) seeks to track the performance of the S&P U.S. Dividend Growers Index.That index seeks out U.S.-based companies that have at least a 10 year history of increasing their dividends, excluding Real Estate Investment Trusts. In addition, the index passes on the highest yielding 25% of companies that would otherwise qualify.
Source Fool.com
