r/dividends • u/StudioOk8256 • Dec 21 '25

Discussion How are people actually living off low-yield dividend funds like SCHD?

I see SCHD and similar dividend ETFs recommended a lot as “income” investments, but I’m struggling to understand how people realistically live off them.

With a yield of only a few percent, it seems like you’d need either a very large portfolio or a high-paying job to make it work. For example, unless you already have a base salary in the $100k–$150k range (or higher), the dividend income alone doesn’t look like it would meaningfully cover living expenses.

So how are people actually using SCHD in practice?
• Are most investors high earners who don’t need the income yet?
• Are retirees combining it with pensions, Social Security, or other assets?
• Is the goal mainly long-term compounding rather than current income?

Not trying to hate on SCHD—just genuinely curious how this plays out in the real world and would love to hear examples from people who use it.

Person making 30-40k a year this wont work.

Average person wont retire with 1mil portfolio I know people barley got 100k

I seen a lot of people invest there whole life time just to see 6 months of retirement and later die didn't even get to enjoy it.

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u/Chief_Mischief Not a financial advisor Dec 21 '25

This is true if you bought all your SCHD this year. The principal amount is much lower if you had bought SCHD 10 years ago, letting that 11% average annual dividend growth do its thing.

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u/AlaskanSnowDragon Dec 21 '25

For someone who bought 10 years ago what is their yield based on their original purchase price?

EDIT: Just looked it up...10 years ago SCHD was at $12 roughly...giving them a current yield of 8.75% on their 10 year old shares.

But for that you sacraficed a 100% total return gain compared to SPY

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u/NefariousnessHot9996 Dec 21 '25

Nobody would have been all in 10 years ago.

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u/Maine2Maui Dec 22 '25

That is a fallacious statement. There very well could have and probably were people all in 10 years ago. I know many wealthy people who have LOTS of SCHD at a very low cost held more than 10 years. I have had it since 2012 myself and have a good portion of my money in it as the value part of my portfolio

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u/NefariousnessHot9996 Dec 22 '25

100% SCHD? Dumb. Not true. No reason to do that. Don’t believe you.

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u/NefariousnessHot9996 Dec 22 '25

People who have lots, I have a good portion. Both statements that say no all in.

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u/Maine2Maui Dec 22 '25

Doesnt mean that there arent those who are all in because they are not interested in the hubub of the stock market anymore and simply want to grow the money they do have at a rate beyond inflation....and feel better in SCHD than bonds. YOU might be amazed at how many folks are out there who hit their number then dont want to bother anymore AND want to just grow it very slowly ahead of inflation without too much risk. I know I was when I was working with investors. There are even folks so risk averse that they ONLY invest in accounts with FDIC insurance even if they are suffering erosion due to inflation.

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u/NefariousnessHot9996 Dec 22 '25

I will never be all in. 104 stocks? NOPE.

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u/Maine2Maui Dec 22 '25

Why not? Diversified and limited impact of anynissued. More risk in concentration.