Exchange-traded funds (ETFs) offer retirees broad diversification, income, growth, and relatively small expenses, particularly compared with their mutual fund brethren. Our investors have chosen three ETFs that they think would make ideal holdings for retirement. mainstay Standard & Poor's Depository Receipts ETF (NYSEMKT:SPY), Vanguard Total Stock Market (NYSEMKT:VTI), and Invesco's PowerShares S&P 500 High Dividend Low Volatility Portfolio (NYSEMKT:SPHD)

Let's take a closer look.

The first and the biggest

Rich Duprey (Standard & Poor's Depository Receipts ETF): The ETF that started it all, the Standard & Poor's Depository Receipts ETF -- better known by its abbreviation, SPDR -- tracks the S&P 500 market index, changing out its component stocks whenever the index itself elevates or demotes a stock, or if a company gets bought out or goes bankrupt. Its success and popularity over the years since its inception in 1993 eventually spawned a whole raft of ETFs that are now called SPDRs. But investors would be hard-pressed to find a better one than the original.

The benefit of SPY is that it gives you instant diversification across the largest, most stable companies in the U.S., spanning all sectors of the market., and Facebook are its top five holdings. While that by no means makes it a no-risk investment, you're essentially putting your money into the biggest and best in the market. You're not putting your hard-earned eggs in one or just a few baskets but in hundreds of baskets, so if one implodes, it doesn't take your retirement savings with it.

Now, you do pay slightly more for SPY than you would, say, for the Vanguard S&P 500 ETF. The expense ratio of the former is 0.0945%, compared with 0.04% for the latter But it still remains comparatively low next to the peer average of 1.073%. And because SPY is a unit investment trust, it holds on to dividends in cash until they're paid out, Vanguard's VOO and the iShares Core S&P 500 ETF reinvest dividends into their constituent stocks until the payout date arrives.

But Vanguard and iShares are able to invest in derivatives to generate a small amount of extra cash -- and take a cut of it -- and that introduces more, though admittedly small, risk into their ETFs. The original SPDR ETF is still the largest, easiest, and most stable of them all.

Picture of a smiling gray-haired man grabbing his golf clubs.

Image source: Getty Images.

A little growth with that retirement income?

Tim Brugger (Vanguard Total Stock Market): A common misconception as investors approach, or are in, retirement is that conservative income with a touch of growth is all that's needed. But inflation risk -- the failure to outperform inflation as measured by the consumer price index (CPI) -- is a legitimate concern for retirees. That's why a retiree would be wise to make a little bit of portfolio room for the likes of Vanguard's Total Stock Market ETF.

This ETF boasts  a whopping 3,605 stocks, 99.9% of which are domestic holdings, with a combined earnings growth rate of an impressive 10% -- which matches the ETF's year-to-date performance. Though mid- and small-cap stocks are also included, the average market capitalization of its holdings is $59.8 billion.

Total Stock Market ETF also employs a buy-and-hold strategy, with just a 4.1% annual turnover rate -- which in turn means its expense ratio is a meager 0.04%. As for diversification, 77% of Vanguard's Total Stock Market ETF holdings are in the financial, technology, consumer-goods, industrials, and healthcare sectors, with the balance spread across another six markets.

For the more growth-oriented position most every stock portfolio needs -- though it does have a 1.9% dividend yield, too -- Vanguard Total Stock Market ETF warrants strong consideration in retirement.

A combination too good to ignore

Neha Chamaria (PowerShares S&P 500 High Dividend Low Volatility Portfolio): Dividend stocks can be a retiree's great friend thanks to the extra income that comes along. Even better if you can invest in a group of high dividend stocks at one go. That's where ETFs comes handy; but among the several dividend ETFs out there, my top recommendation for retirees is Invesco's PowerShares S&P 500 High Dividend Low Volatility Portfolio.

You may have guessed by its name why this ETF is well suited for retirement – the formidable combination of high dividend and low volatility. The ETF tracks the S&P 500 Low Volatility-High Dividend Index, which comprises 50 stocks with the highest yield that were also the least volatile based on the standard deviation of the daily stock prices during the trailing 252 trading days. Not surprisingly, the ETF has greater exposure to defensive sectors like utilities and consumer non-cyclicals than sectors like technology and energy. Stocks like real estate investment trusts Iron Mountain and Welltower Inc. and utility Entergy Corporation have a high weightage in the ETF.

You just have to see the ETF's total returns since inception to understand why low volatility can be an added advantage.

SPHD Total Return Price Chart

While an expense ratio of 0.3% isn't among the lowest in ETFs, a distribution yield of 3.7% and the underlying theme of high yield plus low volatility makes the PowerShares S&P 500 High Dividend Low Volatility Portfolio a great investment option to consider for your golden years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.