"Undoubtedly, you don't need to chase higher yielders when you're getting ready to retire if you have plans to subscribe to the "4% rule," which entails 4% in annual drawdowns from your portfolio. However, if you're keen on living off the dividends or, at the very least, supplementing a drawdown strategy with dividend payers, there are some dividend ETFs that are worth knowing about before you have your next meeting with your financial adviser or retirement planner."
"Not too surprisingly, we have the Schwab Dividend U.S. Equity (NYSEARCA:SCHD) as a top pick for dividend-focused retirees to consider as a core holding. The SCHD offers a 3.79% yield and provides broad exposure to a number of firms with dividends that are on a very sound footing. Many of the holdings are also well-positioned to grow their payout annually."
ETF options allow portfolios to be simple or complex based on individual needs. Some retirees may remain invested in the same ETFs bought during the workforce while others may shift from growth to income-focused holdings. The 4% rule involves annual portfolio drawdowns of 4%, reducing the need to chase high-yield investments. Dividend-paying ETFs can supplement drawdown strategies or fund living expenses directly. A recommended trio of dividend ETFs can work together as core retirement holdings. Schwab Dividend U.S. Equity (SCHD) is a top core pick, yielding 3.79% with broad exposure to firms whose dividends are on sound footing and many that can grow payouts annually. Higher yield generally implies lower expected capital growth.
Read at 24/7 Wall St.
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