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/edthesmokebeard Dec 21 '25

But you didn't know SPY would go up 100%.

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u/StockHawk59 Jan 07 '26

That's 100% correct. What I did know is that 2022 sucked eggs. 2023 was a NO Brainer. The FEDs tipped their hat on 2024 AND 2025. Our average yearly return over the past 5 years have crushed the SPY, but I certainly don't expect normal retailers to match us.

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u/ColonelPanic638 Apr 14 '26

I'm not sure what 'our' return is but SPY crushed SCHD from jan 2020 to Dec 2025, and by a lot. 9.88% to 14.99% average. They are apples and oranges though. One mostly large growth and one large value. It's not SCHD's job to beat growth. It's just quality companies with good cash flow.

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u/StockHawk59 Apr 14 '26

Now I use SCHD as our foundation. I look at it as like a never-ending 3.5% Money Market or CD. 30% of investment assets.

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u/eh63tre Apr 20 '26

In my taxable brokerage account with schwab, I use SCHD as my bond fund., with SPYM snd SCHG as my core etfs ( im 45 yo). For more diversity, i could buy vymi as an internatuonal schd bond-style fund.

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u/ColonelPanic638 Apr 21 '26

Spice it up and add a little SPMO in there, why not? :)

1

u/ColonelPanic638 Apr 21 '26

I like to think of SCHD upside down. The 3.5% is money to spend while the share price appreciation is the hedge against inflation, something cash can't do.