3 High-Yield Dividend ETFs That Are Perfect for Retirees

A record number of retirees are deciding to retire every day as those born during the baby boom are turning into the retirement boom. The stock market has been their best friend so far, and ETFs like iShares 20+ Year Treasury Bond BuyWrite Strat ETF (BATS:TLTW), VistaShares Target 15 Berkshire Select Income ETF (NYSEARCA:OMAH), Strategy Shares Gold-Hedged Bond ETF (BATS:GOLY) are still perfect for them. Last year was the “peak of the peak,” but the trend of high numbers of people turning 65 will continue for several more years through 2030.

Social security isn’t the only way their income has been able to cope with the rising bills. The stock market has been surging, and high-yielding assets have helped them get yields as high as double the rate of inflation or more. If you’re a retiree or you plan to be retired, it’s not a good idea to miss out on them.

You can play passively and allocate a small amount of your portfolio in these high-yield ETFs. You can then reinvest to snowball your holdings or cash in on the income. Either way, you’re more likely to be ahead than those sitting on stale cash.

All three of the following ETFs pay monthly.

iShares 20+ Year Treasury Bond BuyWrite Strat ETF (TLTW)

If you want to hedge against a recession while getting paid a hefty yield, TLTW packs both into one. This ETF holds the iShares 20+ Year Treasury Bond ETF (NASDAQ | TLT Price Prediction:TLT) and then writes call options on its holdings to generate extra income on top. TLT itself yields over 4.4%, with TLTW’s strategy driving it up to 14.8%. The expense ratio is just 0.35%, or $35 per $10,000.

TLTW’s underlying holdings are exposed to long-term bonds, so these are very stable assets. If these Treasury bonds trade sideways or lose value, TLTW will lose value, but they’ve likely bottomed out. The Federal Reserve is cutting interest rates again, and Fed Chair Jerome Powell is expected to be replaced with a Trump appointee this year.

Thus, lower interest rates are likely to make bonds even pricier, so I expect TLTW to return yields plus some capital appreciation. Better yet, if the market gets hit with a recession, I expect TLTW to surge instead of declining. Bonds are the only “safe” assets during a recession and should rise in value, just like they did in 2008.

VistaShares Target 15 Berkshire Select Income ETF (OMAH)

Warren Buffett retired (well, sort of) last week, but he is still the Chairman of the company’s board and retains significant voting power through his Class A shares. He passed over the CEO position to Greg Abel, and Wall Street seems to be satisfied with that decision so far.

Buffett has left a massive portfolio of over $314 billion, something that can’t be changed overnight. His effects will be felt for decades after he leaves. After all, they’re long-term holdings. VistaShares Target 15 Berkshire Select Income ETF takes advantage of it.

It is designed to deliver income first (with a stated annual income target of 15%) and long-term capital appreciation second, by holding a Berkshire Hathaway–inspired stock basket and running an options overlay to generate option premiums.​

OMAH comes with a 12.83% yield and an expense ratio of 0.95%. If you believe Buffett’s picks are primed to do well, it’s a good idea to buy.

Strategy Shares Gold-Hedged Bond ETF (GOLY)

Gold prices are exploding higher. There’s no telling when the rally will end or plateau, as the structural trends behind gold’s rise seem firm. Major gold-exporting countries are under export restrictions. Plus, central banks worldwide are on a buying spree to stockpile as much as possible.

GOLY turns this into an income stream while giving you exposure to gold’s upside. It comes with a dividend yield of 7.25% and an expense ratio of 0.79%.

GOLY is up nearly 45% over the past year, even without factoring in the dividend. It’s an excellent buy if you believe gold will continue to climb for the foreseeable future.