Quick Read
Keep costs low: All three of these Vanguard income ETFs feature rock-bottom expense ratios that leave more of your returns in your pocket.
Balance income with growth: VYM provides current income, VIG focuses on compounding, and VTEB adds stability through high-quality municipal bonds.
Don’t ignore taxes: Qualified dividends from VYM and VIG, combined with federally tax-exempt income from VTEB, can meaningfully improve after-tax retirement income.
This lithium producer surpassed a $1B private valuation, joining some of America’s most powerful startups. Now you can invest in EnergyX alongside global giants like General Motors, but only through July 16. (sponsor)
Courtesy of The Vanguard Group
Many Americans are understandably worried about the future of Social Security. Under current projections, the program’s trust fund could become depleted around 2033, after which incoming payroll taxes alone would likely cover only a portion of scheduled benefits unless Congress acts. I think the easiest long-term solution would be to allow the trust fund to invest in a broader range of growth assets rather than primarily government securities, but that’s ultimately a policy decision.
For now, retirement planning falls on individuals. The closer you are to claiming Social Security, the more important your portfolio allocation becomes. Someone retiring at 62 but delaying benefits until age 67, for example, has a five-year income gap to bridge. During that period, dependable income and tax efficiency often deserve greater emphasis than maximizing long-term growth. Once Social Security begins, the portfolio can shoulder less of the monthly spending burden and focus more on preserving and growing wealth.
My philosophy has always been to avoid unnecessary complexity. Rather than chasing exotic derivatives or high-yield products, prioritize low fees, broad diversification, and tax efficiency. Above all, remember that total return matters far more than headline yield over a retirement that could last 20 or 30 years. Here are three Vanguard ETFs that could work.
July 16 is the Final Day to Tap Into the Lithium Boom (sponsor)
General Motors, POSCO, and 50,000+ everyday investors have already backed lithium producer EnergyX.
Here’s why you should do the same before their July 16 investment deadline: lithium prices are up 75% this year, with demand projected to grow a staggering 5X by 2040.
With tech that can recover up to 3X more lithium than traditional methods, EnergyX is preparing to unlock up to 15M+ tons. Become a private-stage EnergyX investor before the July 16 deadline.
Vanguard High Dividend Yield ETF (VYM)
The Vanguard High Dividend Yield ETF (VYM) tracks the FTSE High Dividend Yield Index. The index excludes REITs, removes companies that have not paid a regular dividend over the past 12 months or are not expected to pay one over the coming year, then ranks the remaining companies by forward dividend yield before weighting them by market capitalization.
The result is essentially a broadly diversified value ETF with roughly 600 holdings. Compared with the S&P 500, the portfolio trades at more attractive valuations while maintaining exposure across virtually every major sector.
After its tiny 0.04% expense ratio, VYM currently offers a 2.25% 30-day SEC yield. Importantly, 100% of its 2025 distributions qualified for favorable qualified dividend tax treatment, thanks largely to its focus on U.S. corporations and exclusion of REITs.
For many retirees, allocating roughly one-third of a portfolio to VYM provides a solid foundation of dividend income while still leaving meaningful room for long-term capital appreciation.
Vanguard Dividend Appreciation ETF (VIG)
The Vanguard Dividend Appreciation ETF (VIG) takes a different approach. Rather than targeting today’s highest yields, it tracks the S&P U.S. Dividend Growers Index, which requires companies to have increased their dividends for at least 10 consecutive years.
The index also incorporates a quality screen by excluding the top 25% of the highest-yielding companies, helping avoid potential dividend traps where unusually high yields may reflect deteriorating business fundamentals rather than attractive opportunities.
Like VYM, the fund excludes REITs and uses a market-cap weighted methodology with a 4% cap on any individual holding to improve diversification. During 2025, 100% of its distributions also qualified as qualified dividends.
The current 30-day SEC yield is a modest 1.52%, but VIG is designed less for current income than for steadily growing income through dividend increases and capital appreciation. Combined with an expense ratio of just 0.04%, it remains one of the cheapest dividend growth ETFs available.
A one-third allocation complements VYM by emphasizing dividend growth rather than simply current yield, which can help your retirement portfolio mitigate inflation long-term.
Vanguard Tax-Exempt Bond ETF (VTEB)
The final third of the portfolio can be allocated to the Vanguard Tax-Exempt Bond ETF (VTEB), which focuses exclusively on investment-grade municipal bonds through the Standard & Poor’s National AMT-Free Municipal Bond Index.
The ETF currently offers a 3.49% 30-day SEC yield while charging just a 0.03% expense ratio. More importantly for retirees investing in taxable accounts, most of its income is exempt from federal income tax as well as the Alternative Minimum Tax (AMT).
That combination of high credit quality, attractive after-tax income, and relatively low costs makes VTEB an appealing ballast alongside an equity-heavy retirement portfolio. While municipal bonds generally produce lower pre-tax yields than taxable bonds, the tax savings can leave many retirees ahead on an after-tax basis.
Allocating the final one-third of your retirement income portfolio to VTEB nearly hedges some of the equity risk from VIG and VYM, while delivering higher tax-efficient yield.
Meet America’s Newest $1b Unicorn (Sponsor)
A US startup just passed a $1 billion private valuation, joining billion-dollar private companies like OpenAI and ByteDance. Unlike those other unicorns, you can invest in EnergyX right now; but only until July 16.
Over 50,000 people already have, along with global giants like General Motors and POSCO.
Here’s why there’s so much interest: EnergyX’s patented tech can recover up to 3X more lithium than traditional methods. That’s a big deal, as demand for lithium is expected to 5X current production levels by 2040. Become an early-stage EnergyX shareholder before the 7/16 investment deadline.
Contact editorial@247wallst.com for any questions or corrections.
