Recommended SCHD Allocation
25%
$25,000
Estimated Annual Dividend Income
$977.50
Based on current 3.91% yield
Estimated Return
9.8%
Estimated Risk
Moderate
Dividend Yield
2.37%
Income Ratio
24.4%
Your portfolio is balanced for long-term growth with some income generation. The 25% allocation to SCHD complements your existing investments while providing quality dividend exposure. This allocation balances your income needs while maintaining growth potential over your investment horizon.
Your allocation to SCHD should align with whether you're prioritizing growth, income, or a balance of both. SCHD typically offers moderate growth with above-average dividend income.
While SCHD is less volatile than many stock investments due to its focus on quality dividend payers, it still experiences market fluctuations. Your comfort with volatility should influence allocation.
Longer time horizons can accommodate higher SCHD allocations, allowing dividend growth to compound. Shorter horizons may require more conservative allocations.
If you're relying on your portfolio for income, SCHD's 3.91% yield can be attractive, potentially justifying a higher allocation depending on your needs.
SCHD concentrates in certain sectors like financials (24%), healthcare (18%), and consumer staples (15%). Consider how this complements your existing holdings.
SCHD primarily holds large-cap, established companies. For comprehensive diversification, consider complementing with mid/small-cap exposure.
SCHD has a value orientation compared to the broader market. Balance with growth-oriented investments if appropriate for your strategy.
SCHD focuses entirely on U.S. stocks. Consider international dividend ETFs for global diversification.
| Life Stage | Typical SCHD Allocation | Considerations |
|---|---|---|
| Early Career (20s-30s) | 10-20% | Focus on total return and growth. SCHD provides dividend foundation while allowing more growth-oriented investments to dominate. |
| Mid-Career (40s-50s) | 20-35% | Balanced approach as wealth builds. SCHD's quality focus provides stability while maintaining growth potential. |
| Pre-Retirement (50s-60s) | 25-45% | Begin transitioning to income focus. SCHD's growing dividends help prepare for retirement income needs. |
| Retirement (65+) | 30-50% | Income generation becomes primary. SCHD's quality dividend payers with growth potential help combat inflation in retirement. |
Prioritizes current income while maintaining moderate growth potential. Higher SCHD allocation generates reliable dividend income.
Balances growth and income objectives. SCHD provides quality dividend exposure while allowing substantial growth allocation.
Focuses on long-term capital appreciation. Lower SCHD allocation provides some dividend exposure and reduced volatility.
There's no universal "ideal percentage" of SCHD that applies to everyone. The appropriate allocation depends on your specific circumstances including investment goals, risk tolerance, time horizon, and existing portfolio composition. Generally, SCHD allocations range from 10-20% for growth-focused investors to 40-50% for income-focused investors. This calculator provides personalized recommendations based on your unique situation.
Many investors do increase their SCHD allocation as retirement approaches, as the need for reliable income becomes more important. SCHD's focus on quality dividend-paying companies with histories of dividend growth makes it well-suited for retirement portfolios. However, the specific increase should be part of a broader shift in asset allocation that considers your entire financial picture, including other income sources like Social Security, pensions, and other investments.
While SCHD is a high-quality ETF with ~100 dividend-paying companies, using it as your only equity holding creates concentration risks. SCHD has sector biases (higher allocations to financials, consumer staples, industrials, and healthcare) and lacks exposure to certain segments (small caps, international stocks, and some growth-oriented sectors). For most investors, complementing SCHD with broader market ETFs and international exposure creates a more diversified portfolio with potentially better risk-adjusted returns.
In a traditional three-fund portfolio (U.S. total market, international stocks, and bonds), SCHD can be incorporated as part of the U.S. equity allocation. For example, instead of allocating 60% to a total U.S. market fund, you might allocate 40% to a total market fund and 20% to SCHD. This maintains broad market exposure while tilting toward quality dividend payers that can enhance income and potentially reduce volatility. The specific split depends on your income needs and investment objectives.
Dramatically changing your SCHD allocation in response to market movements often leads to poor long-term results. However, market downturns can present opportunities for tactical rebalancing. If you've established target allocations (e.g., 25% SCHD), market movements will naturally cause these percentages to drift. Periodic rebalancing back to your targets—which might mean buying more SCHD during downturns—is a disciplined approach that helps maintain your desired risk profile while potentially enhancing returns.
Calculate how dividend reinvestment can accelerate your SCHD investment growth over time.
Determine how much SCHD you need to meet your retirement income goals.
Compare the performance of SCHD against the S&P 500 to see which investment better suits your goals.