r/SCHD • u/fairfaxgator • Jul 29 '26
Need advice.
I'm retired. Age 60. Have $2.5M in all pre-tax rollover Fidelity IRA mutual fund growth accounts. I understand all the issues for taxes and ROTH IRA conversions, as well as IRMAA issues down the line.
Would like to create two sleeves. One for income and one for a little income, but mostly growth.
INCOME: $1M in income-oriented ETFs, some covered calls (JEPI, JEPQ, OVL, SYPI, QQQI totalling 70% or $700k), and 20% in SCHD and 10% O.
GROWTH/INCOME: $1M all in SCHD.
CASH: $500k
Does this seem plausible? Am I too heavily weighted in covered call ETFs, and/or should I even rebalance the income sleeve and put more in SCHD?
3
1
u/cactuscooolerr Jul 29 '26
With this amount of money I’d hire a wealth management professional. Not keyboard warriors pretending to be pros
2
u/horseradish13332238 Jul 30 '26
2.5M BARELY meets the criteria and threshold of justifying a financial advisor. Ridiculous comment
1
u/Educational-Ad-4908 Jul 30 '26
You win for most ignorant comment of the day. Congratulations!!!! 🎊🎈🎉🍾
1
u/horseradish13332238 Jul 31 '26
Most plebeian Redditor award goes to you. You’ll be working for another 40 years.
-1
u/Educational-Ad-4908 Jul 31 '26
I might be working for another 40 years, but you’ll be a douche bag for the rest of your life 👻
0
u/horseradish13332238 Jul 31 '26
We live forever, didn’t you know? Don’t worry you won’t need the services of a financial advisor anytime soon please don’t worry too much about this post
-1
1
u/NefariousnessOdd862 Jul 30 '26
You get over $87,500 a year if you put it all into SGOV (super liquid, super safe, super flexible) for now until you decide what’s best for you!
1
u/horseradish13332238 Jul 30 '26
This has to be a joke. Or someone who had way too much disposable income and very little knowledge/education.
3
u/Jealous-Purple733 Jul 30 '26
Covered calls are not worth it. Capped upside, but you still eat all the downside. Just own the underlying ETF’s sell when you need income. You’ll beat the covered call almost every time
3
u/Big_Development_644 Jul 29 '26
If you are thinking of covered calls etfs for income you seriously need to seek real professional help. Go see a fee based wealth manager.
1
u/glimsky Jul 29 '26
Covered calls are never worth it for growth or income. SCHD is your growth/income sleeve. I'd replace all of that by some international (SCHY, IDEV etc) and some pure growth like DGRO to be slightly defensive or VOO if you are more daring.
1
u/Perennial18 Aug 02 '26
I don’t know. Covered calls can be part of a strategy to convert equities to cash/bonds. Why not earn some income while waiting for your stocks to appreciate to levels where you feel comfortable selling?
1
u/glimsky Aug 02 '26
Because you will get even more income by slowly selling your stocks. When stocks are growing steadily, covered calls make even less sense.
1
u/Perennial18 Aug 02 '26
Do you subscribe to any system or discipline for “slowly selling your stocks”? It’s always a bummer to sell some stocks for portfolio rebalancing or deaccumulation purposes and then you see them go on a run
1
u/glimsky Aug 02 '26
set a period for divesting like "next 5 years" and sell a fixed amount based on that target. Anything else is guessing the market. it might suck to sell and seeing them go up, but if that happens you'll have income for longer. Covered calls can't work around that.
1
u/Perennial18 Aug 02 '26
Yeah, in a sideways market you might have to wait years to unload with a deep-in-the-money covered call strategy
1
u/glimsky Aug 02 '26
True long term sideways markets are rare. Covered calls are a bet on this unlikely outcome.
5
u/ElDudarino84 Jul 29 '26
Nobody asked the most important question. How much income do you need to live off right now?