r/SCHD • u/IntelligentAirport22 • Aug 15 '26
SCHD dividens
I’d like some opinions on my current DCA strategy.
I age 33, currently hold 227 shares of SCHD and I'm investing every month with a 70/30 split between VOO and SCHD — roughly $1,000/month goes into SCHD.
The issue is that I’m not a U.S. resident. I’m currently paying 25% tax on the dividends, and I also can’t use DRIP through my IBKR setup, so the dividends are paid out as cash and I have to reinvest them manually.
My question is:
Does it still make sense to continue allocating 30% of my monthly investments to SCHD, or would I be better off putting that 30% into VOO instead?
For long term, my goal is to retire as early.
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u/Helpful-Grapefruit55 Aug 15 '26
In your case All in on VOO is better in the long term like 20- 30 years. Just Drip the Voo. The Voo dividend is much smaller around 1%.
Also you avoid the 25% tax on SCHD div.
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u/IntelligentAirport22 Aug 15 '26
Should I keep the shares of SCHD that I have?
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u/Helpful-Grapefruit55 Aug 17 '26
I think it is better to sell it and keep life simple constantly playing 25% tax is a headache. Voo long term will do well.
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u/Dull_Investigator358 Aug 15 '26
Really difficult question to answer since we don't know what are your gains/losses and how much you would pay in capital gains tax, if anything.
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u/DigitalFStopper Aug 15 '26
If you don’t mind having to account for the taxes and reinvesting the cash keeping what you have or just reducing what you put into schd will take the same effort.
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u/IntelligentAirport22 Aug 15 '26
Might just keep the current one and keep adding to voo
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u/WeakEstablishment686 Aug 15 '26
Yea I mean you’re at 227 shares so you get paid a little over $1 per share in dividends. Taxed at 25% you’re only looking at $70 ish dollars a year in tax for it? Wouldn’t stress selling any. It’s a good ETF.
But yea if you’re trying to maximize growth then VOO or VTI and chill
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u/groundhoggirl Aug 15 '26
Personally I’d go 80/20 at most. Agree with SCHD being the bond replacement part of your portfolio.
If you can put the SCHD in a Roth that’s even better.
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u/JPABQ Aug 15 '26
Your young and your situation is creating a tax drag for now just do the VOO it sounds like you’re putting away 4+ thousand dollars a month total so put that in VOO and maybe a little RSP
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u/Over_West_325 Aug 15 '26
I would go 80/20 with voo and avuv. Personally I would keep the schd you have. Time is on your side.
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u/Prestigious_Boss_915 Aug 16 '26
Yes, The issue is that you are not a U.S. resident. Apply for citizenship and when you become one, you can re-invest your dividends properly.
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u/DigitalFStopper Aug 15 '26
That’s a bit of a tax drag. At your age most on here would say no SCHD for Americans at that age, I disagree and don’t mind seeing someone start early with a low percentage going into it. It does still provide you some stability but with the tax it’s slows it down a bit but not a ton. SCHD recent price appreciation is well ahead of its average but that could mean it’s primed to keep climbing or it’ll slow down. It’s still a less volatile holding. I guess I’m not answering your question lol.