This Vanguard Fund Has Raised Its Dividend 18 Consecutive Years and Most Retirees Still Don’t Own It

Dividend income can be a great source of income for retirees because dividends provide consistent and predictable cash flow without requiring you to sell assets.

Many stable, established companies reward their investors with dividends, and while companies can reduce their dividends, it’s not terribly common, so retirees can feel fairly confident that their income isn’t going to see many big downward swings if they’re getting a good portion of it from dividends. 

Investing in funds that pay dividends can provide even more reliable income than buying companies that pay high dividends, since the money in the fund is pooled across a mix of different assets. And there’s one particular fund retirees may want to take a close look at because of its consistent history of dividend growth and its low expense ratio.  It’s a fund many retirees don’t yet own, but that they may want to add to their portfolio. 

Here’s what it is.

Retirees should take a close look at this dividend stock

For retirees who are interested in earning stable dividend income, the Vanguard High Dividend Yield ETF (NYSEARCA:VYM | VYM Price Prediction) is a great option. The Vanguard High Dividend Yield ETF currently advertises a 2.37% dividend yield as of February 28, 2026, which is a fairly impressive dividend yield. But there’s much more to the story.

VYM earned some attention when it recently increased its quarterly distributions from  $0.8417 to $0.9474 per share, and while upping the dividend by a dime per share may not seem like much, that amounts to a 12.56% increase.  More importantly, it is far from the first increase. It’s part of a consistent pattern of dividend growth. In fact, VYM has increased its dividend from $0.175 at the November 2006 launch to $0.9474 per share today.

This almost 5X increase means investors continue to see their income grow substantially, while enjoying the consistency that the fund offers, as it has also paid dividends every quarter since its launch.

VYM also has plenty of other retiree-friendly features, too. The fund is linked to the  FTSE High Dividend Yield Index, which offers exposure to hundreds of dividend-paying large-cap companies. In total, VYM has around 559 holdings, so it provides solid diversification with a single purchase. And, its expense ratio of just 0.04% means nearly every dollar of dividend income is available to investors. 

How much income can VYM provide?

So, for retirees interested in VYM, how much income can the dividend fund actually produce? That’s going to depend on your investment level. Specifically:

• A $100,000 position would generate around $2,340 per year in dividend income
• A $250,000 position generates around $5,850 per year
• A $500,000 position generates around $11,700 per year. 

As you can see, the more you have invested, the greater your potential annual income. And, if the dividend continues to grow at a similar pace to its historical rates since the start of the fund, you can expect your yields to increase generously. 

In fact, based on the dividend’s past growth and reasonable projections for future growth — which ends up at around 6–7% per year — a $100,000 position today could produce around $32,000 in dividend income over the coming decade, and could generate an estimated $4,500 in annual dividend income by 2036

Retirees looking for a durable, low-cost fund that has enjoyed impressive dividend growth should consider whether VYM deserves a place in their portfolio, especially given its low expense ratio.  A financial advisor can provide insight into whether this investment is the right one, and can also offer assistance in building a customized portfolio that takes into account your investing timeline and risk tolerance.