Want Passive Income for Retirement? Here's 1 ETF Worth Looking At.

In retirement, it's crucial to set yourself up with reliable income to take the place of your paycheck. And you can probably count on Social Security to cover a portion of your retirement expenses.

But those benefits probably won't pay your bills in full, since they're only designed to replace about 40% of your pre-retirement earnings. Having additional income from investments can help pay for everyday costs, protect against rising prices, and provide more flexibility.

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The challenge, of course, is finding the right balance between income and risk. Retirees often can't afford to take the same level of portfolio risk they might have taken during their working years.

That doesn't mean you should avoid stocks altogether, though. In fact, maintaining some exposure to stocks could help your portfolio continue growing and keep pace with inflation.

In that context, though, you may want to lean on investments that provide regular income without requiring a ton of monitoring. If you're looking for passive income to supplement your Social Security checks, the Vanguard High Dividend Yield ETF (NYSEMKT: VYM) may be worth a close look.

It's all about the dividends

The Vanguard High Dividend Yield ETF is designed to track the performance of the FTSE High Dividend Yield Index. Rather than trying to chase the fastest-growing companies, the fund focuses on large U.S. companies that pay above-average dividends. It also holds stocks across a range of industries, allowing for solid diversification.

The nice thing about the Vanguard High Dividend Yield ETF is that it can continue to pay dividends even when the market declines. It also has a low expense ratio of just 0.04%, which means you won't lose a lot of money to fees.

A good way to keep risk in check

The Vanguard High Dividend Yield ETF is not risk-free. Its share price is apt to rise and fall with the broader market, and dividend payments are not guaranteed.

However, the fund's focus on dividend-paying companies makes it a viable choice if you're looking for a mix of income and stability. Many dividend-paying businesses are established operations, which can provide a level of consistency compared to growth-focused companies.

Now this doesn't mean you should put your entire retirement portfolio into this one fund and call it a day. Rather, it should be part of a well-balanced portfolio that includes bonds, cash, growth investments, and other assets.

But if you're looking for relatively predictable income from a simple, low-cost investment, the Vanguard High Dividend Yield ETF could be worth considering.

Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard High Dividend Yield ETF. The Motley Fool has a disclosure policy.