SCHD Tops VIG for Retirement Income With 3% Yield as VIG Offers 1.7%
Updated
Updated · 24/7 Wall St. · Sep 18
SCHD Tops VIG for Retirement Income With 3% Yield as VIG Offers 1.7%
1 articles · Updated · 24/7 Wall St. · Sep 18
Summary
SCHD was judged the better ETF for retirees needing income now because its forward yield is in the low 3% range, versus about 1.7% for VIG, making the payout gap meaningful on a $500,000 portfolio.
That difference stems from methodology: SCHD screens for cash-flow quality, yield, ROE and dividend growth, while VIG requires 10-plus years of dividend hikes but excludes the highest-yielding quartile, steering it toward lower-yielding growth names.
Performance has reflected those bets. SCHD returned 44.24% from 2020 to 2022 against VIG's 28.11%, and is up 24.69% year to date versus 8.39% as a 5.01% 10-year Treasury has pressured longer-duration growth stocks.
The longer view is tighter: VIG returned 242.6% over 10 years versus SCHD's 237.18%, suggesting VIG still suits investors five to 10 years from retirement if falling rates and renewed growth leadership restore its edge.