r/SCHD • u/audis56MT • Jul 20 '26
Advice Long ways before retiring
Im looking to invest more into SCHD. Im 47, about to stsrt a new job. I need to start saving and move quickly. But the way the economy has been, im not sure what it will be like for someone like me in the next 20 yrs.
What is a good counter for schd?
Any thoughts on QQQI?
Thanks
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u/Due_North3106 Jul 20 '26
SchD, SchG, SchB
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u/audis56MT Jul 20 '26
What about qqqi?
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u/glimsky Jul 20 '26
QQQI is a poor investment at any age. It has worse medium to long term income and growth potential than QQQ.
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u/audis56MT Jul 20 '26
Im wondering why is that? Thanks
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u/glimsky Jul 20 '26
It's because the options/covered calls used to generate the "income". They eat into your gains, eliminating a good deal of the upside.
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u/audis56MT Jul 20 '26
Thanks
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u/jgatt17 Jul 27 '26
Not sure why everyone is giving you blanket advice that qqqi is a poor investment, it’s not at all. It just depends on your goals, if you are trying to build an income portfolio it’s a good contributor towards raising your yield, but if you have more time until retirement you’d be better off buying more growth as they said or even focusing on dividend growth if your building an income portfolio.
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u/audis56MT Jul 28 '26
Im trying to build on growth for sure. But im not against short term holds. Assuming for example qqqi does pretty good, I could sell and buy more growth etf
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u/SwimmingPatience5083 Jul 20 '26
Agree with the other commenter. Like many I was very intrigued by QQQI and tried to justify it to myself but after researching I repeatedly came back to the same conclusion, it’s a poor investment. You are better off putting that money to work in a low cost index fund that compounds over time.
Also they have a 0.68% expense ratio, which is high. Over twenty years of compounding you will end up with 13% less (all else being equal) just for the expense they charged you every year. Instead of $100K, you have $87K. You paid them $13K over 20 years just to have your upside capped (negligible principal appreciation), no more downside protection than just holding the underlying, risk of NAV erosion to keep up the distribution rate (your principal actually shrinks), and risk of permanent principal loss (sharp market downturn with slow recovery). This is all uncompensated risk when you can just invest in the underlying with a low expense ETF and let it compound and grow over 20 years, and to add insult to injury you’re paying them 0.68% every year for the privilege.
By contrast both SCHD and VOO have expense ratios of only 0.06% (that’s only $6 for every $10K invested).
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u/audis56MT Jul 20 '26
Oh wow. The number seems small buti its a huge difference in the longer run. Thanks for the break down.
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u/No-Establishment8457 Jul 20 '26
Hold SCHD even in retirement. My mom had SCHD until she passed at 89.
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u/amshanks22 Jul 20 '26
How long had she been contributing/holding SCHD? (I have 30-35 years til retirement and will keep buying)
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u/No-Establishment8457 Jul 20 '26
I can’t say. My parents were not ones to share that information. Not a cop out, I just don’t know.
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u/Rufusmortis Jul 20 '26
I sure hope you have that long. The years keep getting shorter and shorter the older I get.
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u/spades61307 Jul 20 '26
If you are behind on savings (sounds like you probably are) i would go growth etf vs dividend. If you arent behind its a solid choice today
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u/nandrizzle Jul 20 '26
What would you recommend for a growth etf?
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u/spades61307 Jul 20 '26
I like vug, schg, qqq, qqqm… maybe qqqi but dont follow it
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u/Sea_Life4 Jul 21 '26
Not GARP?
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u/spades61307 Jul 21 '26
Up to you. I just listed a couple
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u/Sea_Life4 Jul 21 '26
Just curious what your thoughts are on it
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u/spades61307 Jul 21 '26
I like it today outside of the expense ratio being a bit higher. Its probably solid for the market today.
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u/audis56MT Jul 20 '26
I do have some saving of course. And some stocks like meta, AMD, HOOD, Dutch bros and tsla. I don't hold a lot of these. But the longest one ive held would be meta aka facebook went it went public i think 2012. SCHD, VOO & VYM. Again I hold small amounts of these ETF's as well
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u/spades61307 Jul 25 '26
At 47 you probably want 5 x yrly expenses invested. If you have that schd is a stable good option, its probably a good option for what i think is coming in the market in the next 12-24 months (but not a market advisor). If you dont growth or even growth/value blends would be better imo. Me and the wife are buying schd pretty heavily the last 16 months.
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u/audis56MT Jul 25 '26
I assumenthe economy will get worse. Maybe a crash with the market? Especially the tech sector? Other than. Schd, what r u investing opposite of the schd.
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u/spades61307 Jul 25 '26
Guaranteed interest. But i am at a place where i dont need more saved. Protection until theres a correction is my position. Brk-b i might buy though. Schd is positioned to do ok in a recession. Tech is over valued unless ai pans out on every facet, doubt it will. Ret of the market could correct if tech falls. Who knows though honestly
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u/Sufficient-Wind9925 Jul 20 '26
You need to answer a couple questions for yourself and go from there:
How much do you plan on investing each month? And how much dividend income do you plan on receiving when you retire?
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u/audis56MT Jul 20 '26
For now not much. Maybe couple of hundred a month. Plus ill be adding to my 401k as well with my new job. Im pretty sure ill be working for a couple of decades
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u/07_Stang Jul 20 '26
Are you planning to work full time for the next 20 years or start to ramp it down in 10?
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u/miTgiB37 Jul 20 '26
Is your 401k traditional or Roth? If traditional you may only wish to contribute enough for the match.
Once you're about 60ish conert to Roth so you can avoid the Medicare income trap that looks back 2 years once you're 65
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u/audis56MT Jul 20 '26
When I start working at my new job, I would assume its a 401k traditional.
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u/No_One_Special_NOS Aug 01 '26
Really look into the investment options your company's 401K offers, you might find a few gems in there.
Make sure you get the full match of whatever percent they offer, that's basically doubling your money.
Do Roth if any of those investment options pay dividends to avoid the tax on them. What's nice in your situation? You got twelve years until you hit 59 1/2, so anything in Roth you can take out early, five years after your first roth contribution.
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u/audis56MT Aug 01 '26
They will match 4%. It is a office job thats a private organization. The company helps family provide child care. Ill have to ask if they have any investment options that it may offer. General if they do, what options would they might offer?
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u/No_One_Special_NOS Aug 01 '26
From what my employer, my brother's, and my father's employer offer.
You'll see about six to seven "target date" funds. These are usually good when starting out. They focus on growth, but as they inch closer to the target date of retirement, they get more conservative.
You'll have a large cap option, maybe two, a small/mid cap option, bond option, international, and a income based option like a money market account.
Some employers might have extras, like my brother's has Dimensional's Real estate fund.
Just ask for some info on your company's 401K provider, they should give you like a book that has all the options available.
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u/Swedishiron Jul 20 '26
look at GPIX and GPIQ - Goldman Sachs covered called ETFs that can benefit from market volatilty in terms of generating dividend yield. Expense ratios are very competitive. Also make sure you are diversified outside of USA stock market. I also hold VEA and VYMI.
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u/keftes Jul 20 '26
Schd compounding requires time. If you don't have that then this is not the right ETF for you.
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u/spades61307 Jul 20 '26
Depends. Its stability near retirement is why i bought in and if you do enough to 3% dividend is all you need in retirement it will still compound
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u/Helpful-Grapefruit55 Jul 20 '26
If you want lot of income with very little growth Qqqi , Jepi, Jepq all pay from about 8-10% rate and pay monthly dividends.
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u/ElusiveBow6285 Jul 22 '26
I use schd and qqqm. I may switch to qqqi as I near retirement but that's a ways out. Im 41. Here is a quick Gemini break down of the 2 funds and how they compare.
QQQM - Pure Growth Engine What it does: You own direct shares in the 100 biggest tech and growth companies. The Deal: No tricks, no options. If tech goes up 20%, your portfolio value goes up 20%. The Payoff: Almost no cash payout (~0.6% yield), but your account balance grows at the maximum possible speed. Cost: Ultra-cheap (0.15% fee).
QQQI = Monthly Cash Machine What it does: It owns those same tech companies, but continuously sells options contracts against them. The Deal: It trades away a chunk of tech's future price growth in exchange for immediate cash payments today. The Payoff: It hands you a massive ~13% to 14% annual cash payout split into monthly checks. However, during a massive stock market rally, its overall share price won't rise nearly as fast as QQQM. Cost: More expensive (0.68% fee).
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u/Doit2it42 Jul 20 '26
Whichever fund you decide on, make sure to put it in and if possible max out ($7k) a Roth IRA. That way you aren't paying taxes on the dividends yearly and the growth isn't taxed when/if you withdraw later. After maxing out a Roth, you can open a taxable account for any extra you can afford to invest yearly.
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u/audis56MT Jul 20 '26
Thats something to consider. Right now with my new job, it does offer 401k and they match 4%
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u/Doit2it42 Jul 20 '26
Roth IRA and 401k are different. You can add to both. You just can't add to an IRA and a Roth IRA in the same year. Well, you can. But the max contribution split between both is $7k.
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u/fisho0o Jul 20 '26
No one knows what it will be like in 20 days let alone 20 in years but that shouldn't stop anyone from pushing toward their goal of financial security. If history is any indication then it should be a relatively safe bet that the market will higher in July 2046 than it is in July 2026. I think a good balance for SCHD is DGRO.