I am thinking of exchanging VOO in my Roth 401K and buy SCHD. From what I understand - the idea is to create a monster tax free dividend income in retirement. Anyone else doing it ? Could you share your pros and cons Update- Is there any reason to do this at all ? Seems people are pointing out keeping my VOO till retirement and then exchange for SCHD
That’s an interesting way to look at it. are you suggesting I could just let VOO grow till 60 and then buy whatever is the best dividend index at that time to start the dividend income train?
I’ve seen retired people live on dividend when they have lots of those shares but no w2 income. The tax on qualified dividend is low, so regular 401k seems a better place for SCHD?
Why would you do that? VOO will grow faster, once you are close to retirement, you can then switch to SCHD
That’s an interesting way to look at it. are you suggesting I could just let VOO grow till 60 and then buy whatever is the best dividend index at that time to start the dividend income train?
It doesn’t seem that much different when looking at the numbers. For example, VTI grew from $94 to $235 in the last 10 years, 2.5x; SCHD grew from $36 to $75, 2.1x, while it has more dividends.
SCHD is good and you should buy some. But it’s not all or nothing. Diversify
my roth account is 90% SCHD 10% other ETFs (to cover small cap, international, and emerging markets)
Could you explain the thinking behind this? I have heard it from others as well. Thats why I was thinking of doing something similar. But why?
Schd is stable but it’s not growing up quickly.
With the inflation in the last 2 years, I’m not even sure if it’s going up at all.
If you see a good fund going through a stretch of underperformance, that's a buying opportunity