Three factors are crucial when you're searching for retirement investments — safety, dividends and expenses.

"The funds you pick for retirement should keep an eye on risk, generate some income — and charge relatively little for their services. After all, the less you pay your fund company, the more you keep for yourself," explains John Waggoner of USA Today.

Waggoner lists several funds that shine in those areas and should be included in a retirement portfolio.

The first is the Vanguard Target Retirement Income (VTINX). This is a fund of funds designed as an all-in-one solution for retirees who want to see both their principal and income increase, he writes. The fund allocates 65 percent of assets to bonds and 20 percent to U.S. stocks.

Morningstar gives VTINX its top rating — gold. "Vanguard Target Retirement's unassuming construction has appeal," writes Morningstar analyst Kathryn Spica. "The glide path starts with an industry-average 90 percent/10 percent stock/bond split, keeping a slightly higher allocation to stocks as it gradually rolls down that exposure. . . . By forgoing tactical asset-allocation shifts, the series' results are not prone to timing missteps, letting its overall asset allocation drive results."

The fund has produced an average annual return of 5.6 percent in the past three years, sports a yield of 1.8 percent and has an expense ratio of 0.16 percent.

The second fund Waggoner likes is the Schwab U.S. Dividend Equity ETF (SCHD). "If you're looking for a portfolio of large-company stocks with a long history of raising dividends, this is the fund for you," Waggoner writes. "The fund's criteria looks not only for high dividends, but high-quality earnings and balance sheets as well."

Morningstar analyst Abby Woodham likes it too. "The fund's index includes only large, liquid companies that have paid dividends in each of the past 10 consecutive years, and requires constituents to score well on four fundamental metrics: cash flow/debt, return on equity, dividend yield, and dividend growth," she writes. "The resulting portfolio is one of the most quality-oriented among dividend ETFs. SCHD charges a 0.07 percent expense ratio, which makes it the cheapest dividend ETF available. This fund's high-quality portfolio and low cost make it a suitable core holding for most investors."

The fund has generated an average annual return of 16.5 percent in the past three years and has a yield of 2.6 percent.

Other funds Waggoner suggests are the RiverPark Short-Term High Yield Retail (RPHYX) fund, which invests in short-term, low-quality bonds that have a very low probability of failure, the American Century Equity Income (TWEIX) fund and the Vanguard High Yield Tax Exempt (VWAHX) fund.
 

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