SCHD vs JEPI Comparison Calculator

Both ETFs can serve different roles in a retirement portfolio:

• JEPI provides higher immediate income, making it attractive for retirees who need cash flow now.
• SCHD offers lower current income but better growth potential, which can help protect against inflation over a long retirement.

Many retirees use a combination of both: JEPI for current income needs and SCHD for the growth portion of their portfolio that they'll draw from later.

The tax treatment of these ETFs differs significantly:

• SCHD primarily distributes qualified dividends, which are taxed at the lower capital gains rates (0%, 15%, or 20% depending on your tax bracket).
• JEPI distributes a mix of qualified dividends and ordinary income (from option premiums), with the latter being taxed at higher ordinary income tax rates.

For taxable accounts, SCHD typically offers better tax efficiency. For tax-advantaged accounts like IRAs, the tax difference is less relevant.

Market conditions affect these ETFs differently:

• In bull markets: SCHD typically outperforms JEPI because JEPI's covered call strategy caps upside potential.
• In sideways markets: JEPI often outperforms due to its higher income generation.
• In mild downturns: JEPI may provide better downside protection due to income from option premiums.
• In severe market crashes: Both will likely decline, though SCHD's quality focus may provide some resilience.

Your outlook on market conditions should influence your allocation between these ETFs.

Yes, holding both SCHD and JEPI can be a smart strategy for many investors. The combination offers:

• A balance between current income (JEPI) and growth potential (SCHD)
• Diversification in income generation methods
• Flexibility to adjust your income needs over time

Many investors use a barbell approach: JEPI for higher current income and SCHD for long-term dividend growth. The optimal ratio depends on your time horizon and income needs.