Image source: Getty.

Retirees are living longer than ever, which means it's important for them to keep at least a portion of their portfolios in the stock market. One easy way for these investors to maintain their equity exposure is by owning exchange-traded funds, or ETFs. These funds are highly attractive because they offer instant diversification, can be bought or sold during market hours, and are generally low cost.

Knowing that, we asked a team of Fools to share an ETF that they think is a great choice for a retiree. Read on to see which funds they picked, and why. 

Higher yield, higher return

Brian Feroldi: Most retirees are looking for ways to generate income from their portfolios, which naturally attracts them to funds that own a collection of dividend-paying stocks. One ETF that I think will appeal to these investors is the SPDR S&P Dividend ETF (SDY 0.14%). This fund owns a collection of high-quality stocks that have managed to increase their dividend payouts for at least 20 consecutive years, which is an accomplishment that only an elite group of businesses can claim.

Right now, this fund holds more than 110 stocks from a broad range of market sectors, which makes it extremely well diversified. Importantly, this fund's long-term performance shows that its strategy is working.

Here's a look at the total returns generated by this funds since its inception in 2005 compared to the market, in general, as represented by the Vanguard Total Stock Market ETF.

SDY Total Return Price Chart

SDY Total Return Price data by YCharts.

As you can see, this fund has steadily outperformed the index over time, and all along the way it has paid out a higher dividend yield, too. With a dirt-cheap expense ratio of 0.35% and a current yield of 2.4%, I think this is a great fund for retirees to consider owning.

Follow Warren Buffett's advice

Matt Frankel: I tend to agree with Warren Buffett's logic that a low-cost S&P 500 ETF is the best way for most investors to buy stocks. Doing so is essentially a bet on American business as a whole, and it eliminates the research involved with choosing individual stocks, which many people have neither the time, nor desire, to do.

One great example is the Vanguard S&P 500 ETF (VOO 0.96%), which has a rock-bottom 0.05% expense ratio, and has more than $255 billion in assets. As the name implies, the fund invests in all 500 stocks in the S&P 500 index in proportion to their index weights.

Over time, the S&P 500 (and S&P 500 ETFs) have produced average total returns of about 9.5% per year, which is why it's important to maintain some level of stock exposure in retirement. The bonds and other fixed-income instruments in your portfolio are what generate the bulk of your income, but the growth power of stocks can help your portfolio keep up with inflation, and therefore can allow you to increase your income as time goes on.

As a general rule, I suggest subtracting your age from 110 to determine the percentage of your retirement portfolio that should be in stock-based funds, so a 70-year-old would have a 40% stock allocation. And a low-cost S&P 500 ETF like this Vanguard example is a great core stock holding for retirees.

Don't give up on growth just because you're retired

Jason Hall: According to the Social Security Administration, if you live to age 65, you've got a very high likelihood of living into your 80s. In other words, you should continue to invest at least a portion of your retirement savings for long-term growth. One of the best ways to do that is with the Vanguard Growth ETF (VUG 1.04%)

This fund, which tracks the Center for Research in Security Prices (CRSP) U.S. Large Cap Growth Index, is comprised of just less than 400 large-cap stocks that meet certain criteria tied to earnings growth, and has made for a wonderful investment over the past 10 years:

VUG Total Return Price Chart

VUG Total Return Price data by YCharts.

Yes, growth stocks can be more volatile than blue-chip dividend stocks, and far more volatile than bonds. But over the long term, that volatility and risk often lead to market-beating returns, and the diversified nature of this ETF can help reduce the risk, while also helping retirees boost their retirement savings to help meet their long-term needs. 

If you're still early in your retirement and thinking about ways to boost your nest egg for later in life, investing a small portion of your retirement savings in the Vanguard Growth ETF -- and holding it for many years -- could be an ideal way to grow your retirement wealth for when you'll need it the most.