Investing in individual companies isn't for everyone; those looking to simplify their portfolios should consider exchange-traded funds (ETFs). Simply put, ETFs are a group of securities like stocks or bonds that trade under a single ticker symbol. Just like you can buy stocks in different types of companies, you can buy a variety of ETFs to build a diversified portfolio.

This is especially useful to retirees, who don't necessarily want to get too risky with their investing strategy or spend all of their time combing through stocks. Here are five great ETFs for retirees and conservative investors.

1. The market standard

The S&P 500, which contains 500 of the biggest and best corporations in America, is the widely accepted benchmark for the stock market. So an ETF like the Vanguard 500 ETF (VOO -0.18%) is a great starting point for any portfolio. It's constructed to mimic the S&P 500 and carries a minimal expense ratio of 0.03%. In other words, owning the stock will cost just $0.30 annually for every $1,000 you invest.

Warren Buffett famously won a bet that a hedge fund couldn't outperform the S&P 500 over a 10-year period, so don't be shy about building your portfolio around it. The stock market has averaged roughly 10% in annual returns over its long history.

2. Adding some upside to your portfolio

Some investors may want a little more spark in their portfolio while still staying as simple as possible. The Invesco QQQ ETF (QQQ 0.01%) comes to mind as a great choice. This ETF is built around the Nasdaq-100, which focuses on large-cap growth stocks, often in the technology sector. The fund's top holdings include Apple, Microsoft, Amazon, Alphabet, and Nvidia, which combine to make up about 40% of the ETF's holdings.

Big tech has been a big winner over the past decade, and the QQQ has outperformed the market in that time. That said, growth stocks tend to be volatile, so investors should prepared for the ups and downs that can accompany bear markets like the one in 2022. This ETF also has a higher expense ratio of 0.20%, though its historical returns arguably justify the higher cost.

3. Pay your living expenses with this ETF

Dividends can be a retiree's best friend; they're cash distributions paid to shareholders when a company shares its profits with investors. They can be reinvested or used to pay your living expenses. The Vanguard High Dividend Yield ETF (VYM -0.54%) is one of the best dividend-paying ETFs. The fund has a generous dividend yield of almost 3% but charges a low expense ratio of just 0.06%.

The fund includes over 400 names, concentrated mainly in tried-and-true industries like energy, consumer staples, financials, and healthcare. It's not the flashiest fund you can buy, but you can count on a reliable dividend that beats any savings account at your local bank.

4. Retiring to become a real estate tycoon

Owning real estate is one of humankind's oldest and most proven wealth-building tools. But buying real properties isn't as easy as playing Monopoly. Fortunately, you can benefit from real estate by owning the Schwab U.S. REIT ETF (SCHH -1.37%). This ETF is made up of various real estate investment trusts (REITs), companies specifically structured for owning real estate.

REITs are great dividend stocks, and this carries through to this ETF, which also pays a dividend yielding close to 3% as of this writing. Some of the fund's top holdings include blue chip REITs like American Tower Corporation, Realty Income, and Crown Castle. The fund is another low-cost option for investors with a 0.07% expense ratio.

5. Don't forget about adding bonds to your portfolio

Debt has long been a staple of the global economy, yet it is often overlooked as an investment. You can invest in debt through bonds, and the Vanguard Total World Bond ETF (BNDW -0.24%) is an excellent fund for beginners. The fund holds bonds of varying term lengths from all over the world. In other words, it's a catch-all of bonds to keep your portfolio diverse.

Bonds pay interest, meaning this ETF pays its shareholders dividends. The fund's current dividend yield is just over 2%. That's not super high, but it is high quality. After all, the best dividend is a paid dividend. The Total World Bond ETF gives you broad exposure to investment-grade debt worldwide, which is less likely to default.