The traditional advice for retirees is to sell down risky investments and increase safe ones in retirement .

Traditionally, that has meant selling off stocks and buying bonds. Yet theres little about the current bond market  that seems safe to most. Yields are being held down artificially, driving up bond prices.

Meanwhile, stocks have benefited. Many retirement investors have resorted to buying stocks for their dividend payments. Since bank CDs and money markets are dependent on bonds to generate a return, they too have been out of favor.

As a result, the typical retirement portfolio  right now probably looks like one that makes more sense for a 30-year-old: Big stock holdings, diminished bonds and very little cash.

If the markets turn sharply, this kind of portfolio is at risk. It is, perhaps, no biggie for the 30-year-old. He or she has decades to recover from even a drastic reversal of fortune.

The retiree of today, however, has no such recourse. An immediate hit to income and portfolio value directly impacts their ability to finance food, housing, travel, everything.

The way forward for the cautious retiree is to consider using ETFs in a balanced portfolio. By earning income from a variety of buckets, including divided-paying stocks, high-yield bonds and real estate, the retiree investor can balance out the risks involved in being stock-or bond-heavy in difficult markets.

Some ETFs to consider include:

SPDR Barclays High Yield Bond (JNK)

Follows the U.S. high-yield corporate bond market, i.e. junk bonds. Youve heard of the companies whose debt is held by his fund. Top holdings include Sprint Nextel and hospital companies such as HCA and Tenet Healthcare. Many of these corporations are finding financing a bit of a challenge, so they pay more for their money. As a result, the yield on this ETF is 6.14%.

iShares JPMorgan USD Emerging Markets Bond (EMB)

Offers exposure to a broad, diverse U.S. dollar-denominated emerging markets debt benchmark. Translation: You own a big collection of foreign government debt, translated automatically back into dollars, at a very low cost. This is not a fund where you dump half your money by any means, but it does pay 4.72%.

SPDR Dow Jones REIT (RWR)

Tracking the Dow Jones U.S. Select REIT Index, this real estate fund provides the effect of directly investing in real estate all over the country, such as major malls, office buildings, public storage businesses and apartment housing. It offers diversification and simplicity, two features missing from traditional real estate investments. and pays a 3.22% yield.

iShares Russell 3000 (IWV)