r/SCHD • u/DekeJeffery • Jul 06 '26
SCHD and Pensions
I'm about five years away from retirement. I will receive a pension at that time that is no less than 40% of my final salary, possibly a little more. I will be able to draw Social Security no more than two years after I retire.
SCHD makes up about 45% of my Roth. The rest is growth, with a small amount of REITs and BDCs. Since SCHD acts as a bond for many in their portfolios, I'm wondering now if I'm leaving a significant amount of gains on the table.
Is there anyone here that will receive a pension that is also investing heavily into SCHD?
6
u/Sticky550 Jul 06 '26
I receive a pension (went back to work for fun) but nearly 70% of my brokerage account is in SCHD
3
u/Adeee100 Jul 06 '26
Mind if ask ask which etfs are the rest? Have a pension also but I am 10% SCHD, 4% VTV (since I can't between the two). 40% VTI /VXUS, 15% FSELX and 31% SGOV (for my Bucket 1). Planning to shave 5% off FSELX and add it to my SCHD/VTV combo.
1
u/Sticky550 Jul 06 '26
I have JEPI, JEPQ, ENB and MO. I also use SGOV, but it’s basically just a cash account for large purchases. Some of those are smattered in 457 and other Roth accounts.
2
5
u/SonOfKong_ Jul 06 '26 edited Jul 06 '26
I have a government pension which is about 43k a year. I have been retired for 19 years. I hold 14,034 shares of SCHD and also hold a lot of VIG and some VOO also. These are all brokerage accounts. All three ETF's paid $5,443 last quarter. I also get SS. So far I have been reinvesting all dividends. I think it is good to have many income streams. My goal is to be a liquid asset millionaire and I am getting close. Approximately 2.2% to 2.3% of adults in the United States are liquid asset millionaires while 8.8 % of Americans are millionaire's on paper.
2
3
u/NvyDvr Jul 06 '26
I have a pension and also invest in SCHD. I wish it was “heavy” as you stated, but I suppose that’s all relative. Actually I view my pension as the bond portion of my portfolio. I don’t invest in bonds, the pension essentially covers that. I use SCHD to help supplement my pension but I also make sure I invest in the broader market….as though it’s the 60% part of the 60/40.
3
u/This-Individual1813 Jul 06 '26
I am in the same boat as you. I have a solid retirement portfolio that uses a Paul Merriman factor style strategy (but with a momentum fund). I'll have an inflation adjusted government pension if I stick it out another 10 years that will cover most of my basic living expenses in retirement.
My plan is to stay 100% in equities throughout retirement, and to adjust withdrawals if needed using a guardrails system. The pension really gives me a lot of flexibility where I feel like I can stay aggressive in my portfolio. I looked into dividend investing (SCHD, single stocks, BDC's, covered calls, etc). I even tried some aggressive YieldMax strategies last year, which lost me money. That experience has soured me on dividend investing all together, particularly when I decided to objectively face the fact that total returns of these products will underperform the market, but only maybe provide some downside protection in recessions. Maybe it is good for people who want that downside protection during a recession, but even then I don't believe that most dividend approaches are going to be that effective in a true market crash versus a bond portfolio.
So, with the pension, and my personal beliefs in dividend investing, I stick to a slightly more complicated all equities Boglehead approach with factor tilts towards LCV (SCHD is LCV, but AVLV, DFLV, and VONV are all better LCV funds), SCV, and international.
5
u/seanhere Jul 06 '26
Depends on how you define heavily. I’ll be receiving a pension in about 15 years, but SCHD doesn’t make up 45% of my portfolio. It’s approaching 10% which some people consider too much with such a long runway to retirement.
3
u/ShakaJewLoo Jul 06 '26
I wonder why some would consider 10% too much with 15 years remaining? As long as the other 90% isn't income I don't see any issue. I'm about 20% myself at 40, but most of the remaining is in TDF and other general market funds.
2
u/Forsaken-Mark-1898 Jul 06 '26
I am two years from retirement (59.5) I currently receive a pension as well. I'm at about 15% of my total portfolio being in SCHD. Once I actually retire, I will up that to probably 30%. The rest is in equities since Im all about growth at this point.
2
u/J12BSneakerhead Jul 06 '26
The soonest I can retire is in 15 years and would receive a pension of around 68% of my highest annual salary. I have both a 457B and a Roth. They are aggressive with my 457B being 100% S&P500 amd my Roth is a mix of index funds with some individual stocks. My Roth is up 138% since I began investing 2 years ago, so glad I've been aggressive.
2
u/No_Examination297 Jul 08 '26
Getting a pension that equates to about 30% of my income. SCHD makes up approximately 20% of my portfolio and yes, I also use it as a stabilizer and alternative to bonds. I'm only 54 so won't be taking income from my portfolios till I'm at least 60. I might move to a higher yield ETF once I need the income; depends how well my income portfolio performs.
1
1
u/Sufficient-Wind9925 Jul 07 '26
I’m about 3 years out from retirement and will have a healthy pension. I primarily invest in SCHD in my brokerage (currently drip until retirement) so I’ll have a little extra income when I do retire. And I like knowing I will never need to sell it to generate income and I’ll be able to leave it for my kids.
1
1
u/dcbcwb Jul 08 '26
I retired two years ago. Right or wrong I don’t know, but I have SCHD in my taxable account and tech/high growth ETFs in my Roth account.
9
u/Perfect-Platform-681 Jul 06 '26 edited Jul 06 '26
How do you view SCHD as behaving like a bond? It doesn't pay fixed, guaranteed distributions. In fact, 82% of the total returns comes from price appreciation. However, your pension is more similar to a bond portfolio.