My favorite stock fund for retirees is the Vanguard High Dividend Yield ETF (NYSEMKT: VOO) , which invests in about 400 stocks that have above-average dividend yields. While they are indeed more volatile investments than bonds, for example, they are essential for achieving long-term growth, which you'll need if you want your retirement portfolio to keep pace with inflation. The bottom line is that while retirees generally have lower risk tolerance than younger investors, a reasonable stock allocation is still a good idea.