Each future retiree is unique. \r\n\r\nSome getting close to retirement have more than enough money saved and are looking to preserve their wealth, not grow it. \r\n\r\nOthers are limping to the finish line and need to take more risk to ensure they can generate enough funds to sustain their lifestyle. \r\n\r\nWith that being said, I\u2019m going to assume you are somewhere in the middle. You have money saved but you want assurances you can grow the balance while taking reasonable distributions.\r\n\r\nA couple common themes that you will note below are that I\u2019m trying to keep expenses low, generate the best dividend funds, and get diversification efficiently. \r\n\r\nYou\u2019ll also note that I\u2019m a big Vanguard fan and really only go outside that fund family to grab a unique product.\r\n\r\nThis article focuses on safety.\r\n\r\nSafety comes in both the form of protecting invested dollars but also in fending off the erosive effects of inflation. I will also focus on the best dividend funds that generate a steady, protected dividend. \r\nBest Dividend Funds for Retirement\r\n\r\nHere are some of the best dividend funds you can invest in for retirement\r\nVanguard Short-Term Investment-Grade Admiral (VFSUX)\r\nVanguard Fund\r\n\r\nLess than 20% of the funds are in rated in B or lower-rated bonds which will help if the economy starts to falter. \r\n\r\nThis is the asset class that crashes first in fixed income.\r\n\r\nThe fund currently yields 2.9% on a high-quality portfolio mostly comprised of corporate bonds. The fund also has a 20% allocation to asset-backed securities and commercial mortgages, as well as about 15% in Government Treasuries.\r\n\r\nThe talent leading this fund is deep and diverse; more than 60 managers, analysts and traders. The oversight provided by Vanguard and its risk management techniques should provide additional comfort to investors.\r\nAmerican Funds American Balanced (AWSHX)\r\nAmerican Funds Mutual Fund\r\n\r\nThis fund for the past 10 years has outperformed its peer group.\r\n\r\nThe fund holds 60% of assets in stocks and 40% in bonds, which still gives it some equity upside with the volatility off-set of bonds.\r\n\r\nMore recently over the past three years, Balanced\u2019s annualized returns ranks in the top 10% of all balanced funds.\r\n\r\nLike other portfolios from American Funds, Balanced is run by several managers, each of whom takes charge of his own portion of the fund\u2019s assets.\r\n\r\nThe principal manager, Greg Johnson, controls the stock side, and will adjust allocations based on market conditions. The preference in stocks is to favor large companies that pay consistent dividends.\r\n\r\nFour dedicated bond specialists allocate funds on the debt side of the portfolio. Treasuries and other government-backed instruments make up the lion\u2019s share of this portfolio.\r\n\r\nThis is a strong choice of someone that wants above inflation returns but scares easily.\r\nDodge &amp; Cox Balanced (DODBX)\r\nDodge &amp; Cox Balanced\r\n\r\nDodge &amp; Cox was founded in 1931, and this Balanced portfolio was the first fund the company offered.\r\n\r\nLike other balanced funds, it allocates approximately 60% to stocks and 40% to bonds. This varies over time and manager preference.\r\n\r\nThe prospectus allows the managers to range between 25-75% stock allocation. Currently the fund holds over 2/3rds of its assets in stock.\r\n\r\nThe management team consists of 19 managers. 9 on the stock side, 10 on fixed income.\r\n\r\nIn 2008 (last major down-turn) the fund was allocated 70% to stock and therefore had a 33% drawdown. \r\n\r\nHowever, by staying consistent in their allocation philosophy it has allowed the fund to return 12.1% annualized over the past 10 years and beat 96% of its peers.\r\n\r\nThis is a one-stop shop, and will easily outpace inflation. Current yield on the fund is 2.1%.\r\nDodge &amp; Cox Income (DODIX)\r\nDodge &amp; Cox Income Fund\r\n\r\nThis fund prides itself on a contrarian philosophy. \r\n\r\nEach of the 10 managers actively avoids following the day-to-day headlines and instead looks for the beaten down stocks with a good margin of safety. \r\n\r\nThey load up on existing positions or build new ones, for instance, during times of weakness.\r\n\r\nPicking up bargain investments when they trade at deep discounts, say the fund\u2019s managers, \u201chas enabled us to add value over longer time periods.\u201d\r\nFidelity Balanced (FBALX)\r\nFidelity Investment\r\n\r\nAt Fidelity Balanced, lead managers Bob Stansky on the stock side and Ford O\u2019Neil on the bond side are disproportionately leaning towards stocks these days with over 70% funds sitting there.\r\n\r\nStansky focuses on small to mid-size companies that are consistently growing with a stable cashflow. \r\n\r\nO\u2019Neil focuses mostly on Treasuries, investment-grade corporate debt and mortgage-backed securities.\r\n\r\nBalanced is time-tested and all-weather. The fund beat its peer in 8 of the last 10 years.\r\nMetropolitan West Total Return Bond (MWTRX)\r\nMWTRX Metropolitan West Total Return Bond\r\n\r\nThis is a value-oriented fund led by managers\u2013 Tad Rivelle, Steven Kane, Laird Landmann, and Bryan Whalen \u2013 they buy bonds when they are cheap and sell when they revert to fair value. \r\n\r\nThey focus on high-quality bonds with near-term maturities. The act that separates this fund is that it will develop clear macro views of the world and allocate funds to specific sectors.\r\n\r\nSince 2016 the fund has been preparing for a credit tightening and therefore has over-allocated to Treasuries and high-quality corporate bonds. \r\n\r\nThis call has been premature and has impacted recent peer performance. However, that conservative thinking makes it a very good fit for this list of safest investments. \r\n\r\nOver the past 20 years this fund has outperformed its benchmark and currently yields 3.1%.\r\nVanguard Equity Income (VEIPX)\r\nVanguard Equity Incomes\r\n\r\nThe fund currently yields 2.9% and aims to deliver decent capital appreciation but above-average income. \r\n\r\nIt is succeeding on both fronts, returning 8% over the life of the fund vs. S&amp;P500 6%.\r\n\r\nMichael Reckmeyer, of Wellington Management, and a team of Vanguard managers share duties at Equity Income.\r\n\r\nReckmeyer handles 70% of the fund\u2019s assets and invests heavily in dividend-paying stocks. \r\n\r\nAnd the Vanguard team fills in the balance of the equity side of the fund by using computer modelling to closely mimic index returns and help diversify.\r\nVanguard Inflation-Protected Securities Fund (VIPSX)\r\nVanguard Inflation-Protected Securities Funds\r\n\r\nThis fund invests in Treasury Inflation-Protected Securities, otherwise known as TIPS.\r\n\r\nGemma Wright-Casparius, Manager, who took over in 2011, can invest up to 20% of the fund\u2019s assets in other asset classes as value presents itself.\r\n\r\nToday TIPS makes up 97% of the fund\u2019s assets. The balance of the fund is in cash or Treasuries.\r\n\r\nLooking ahead, Wright-Casparius believes inflation will trend higher and even possibly \u201ccome in stronger\u201d than the market expects. This fund has outperformed the Bloomberg Barclays U.S. Aggregate Bond by almost a full percentage point.