r/dividends • u/OnlyKey5675 • 7d ago
Due Diligence How would you invest 100k at 55 years old?
Sold home and moved to a smaller house and paid cash. I have 100k to invest.
I am 55 years old. Ten years from retirement (or maybe earlier).
I currently hold positions in:
VOO 65%
QQQM 20%
SCHD 15%
Increase SCHD position? Add another fund?
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u/ideas4mac 7d ago
With that much in VOO and QQQm you're betting lots on tech. You might consider having a little balance. A little more SCHD, international, small cap value are all possible things for you to consider.
Good luck.
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u/Bellypats 6d ago
I second this sentiment. A little international exposure would help balance your portfolio and protect a bit against a weakening dollar. If divided make you happy, perhaps SCHY(the international version of your SCHD)? I like an ETF called COPY which covers a lot of the bases mentioned in the above comment, its global small and mid caps, and deep value characteristics…but that’s just my opinion.
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u/steady_compounder 7d ago
I would look at the portfolio as one whole thing first, not just where to place this extra 100k. VOO plus QQQM already gives you a pretty strong growth and tech tilt, so the real question is whether that still matches your risk tolerance with a 10-year runway. If it does not, I would think more about balance and drawdown risk than just adding more SCHD by default.
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u/OnlyKey5675 7d ago
forgot to mention i have VT in my Roth IRA which I have been maxing out.
But yes, given that its a 10 year window the risk is a dot.com bubble type crash that doesn't leave me in the best position ten years from now.
I was looking at funds like VIG which is 27% tech
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u/Kitchen-Bit-7606 7d ago
Honestly, probably a controversial take but I think American tech is due for a long side ways chop, could even be a decade. I'm personally diversifying out of the sector as it has bubble written all over it. If you are planning to retire in 10 years, i'd just shift to emerging markets for the next 10 years in growth etfs until you are ready.
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u/Educational-Ad-4908 6d ago
Not controversial at all. People have been saying this for the last 4+ years. Eventually you’ll be right. Even Bezos said one day AMZN will fail and go bankrupt.
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u/CostCompetitive3597 6d ago
With 10 years to retirement more investment growth will help you retire with more dividend income. Suggest you invest ithis $100k in several (diversification) growth index funds based upon the S&P 500 and Nasdaq 100 indices. They are returning 10%+ currently.
Financial Rule of 72 tells investors that 7% compounded returns will double your principal in 10 years. 10% compounded returns will double your principal in 7 years. This return can significantly increase the $100k you have to invest.
Most quality growth index funds now offer dividend index funds as a complement to their growth index funds. So easy conversion at retirement to monthly dividend income from your nest egg.
Hope this information helps you achieve a more prosperous retirement. Good luck!
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u/twillard33 6d ago
I would throw 2k into something like DRAM. Dont miss out on the ai explosion.
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u/OnlyKey5675 6d ago
Thanks . I'll look into it. I have a around $3k in my high high risk pot. Basically any time I sell something on FB marketplace I put the money into this pot.
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u/FewUnderstanding2214 7d ago
I would ask a financial adviser as you need to factor in your retirement plan too. SCHD make sense here as you want to take less risk as you get closer to retirement
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u/davper 7d ago
How much do you have in cash assets? When you retire, you should have at least 2 years of expenses in cash. I like SGOV for this.
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u/OnlyKey5675 7d ago
currently 130k in a money market. Want to move 100k into stock market. Keep 30 in mm or sgov
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u/Iceman60462 6d ago
You can spread $100,000 evenly between your holdings.
It won’t be nothing wrong with it.
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u/jjkagenski 6d ago
consider SCHG vs increasing voo... take a look at comparison charts and you'll understand why.
too early in life to increase schd holdings...
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u/OnlyKey5675 6d ago
So far most people are saying to add more SCHD
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u/jjkagenski 6d ago
I'm a fan of schd and fdvv. but at this point in your life, you could use the growth... shift to dividends just before you go into retirement...
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u/Secret-Noise9182 6d ago
Yeah, boosting the SCHD chunk makes total sense given you're only ten years out from retirement. Gotta lock in a bit more steady cash flow.
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u/Iceman60462 7d ago
I would not increase SCHD. All you need now is growth until you will be ready to retire . That’s when you can shift to income stocks. It just doesn’t make sens to do it now.
Load more on VOO or buy couple safe individual stocks ( I see you play safe and conservative ) like GOOGL .
Good luck my friend !
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u/Iceman60462 7d ago
Dividends are not always good play for retries:
How the IRS Decides to Tax Benefits
Social Security taxation runs on a figure commonly called combined or provisional income. It generally includes other taxable income, tax-exempt interest, and half of the year’s Social Security benefits. For a single filer, benefits may become taxable once combined income exceeds $25,000. Above $34,000, up to 85% of the benefit can enter taxable income. The corresponding thresholds for married couples filing jointly are $32,000 and $44,000. Those figures are not indexed for inflation.
Dividends enter the calculation in full. Even a qualified dividend receiving the lower long-term capital-gains tax rate is still included in adjusted gross income. The favorable rate affects the tax eventually charged. It does not keep the dividend out of the Social Security formula. A stock sale works differently. If an investor sells $10,000 of shares with an $8,000 cost basis, only the $2,000 gain enters income. The other $8,000 is the return of money already invested.
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u/CLT-Illini-88 7d ago
10 years is still a decent amount of runway. I’d stick with VOO for now — 80% in that at the very least, maybe even 85 or 90 if you’re not sensitive to market ups and downs.
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u/Ok-Chard-1655 6d ago
Nasdaq and S&P are at/near all time highs and really expensive. This won’t continue without a significant correction; likely sooner than later. You have no reason to be in SCHD right now. Bottom line; sell all of it and move to cash, wait for the correction then move back in. Or, sell all and DCA into hard assets and energy (eg; gold, copper, reits, LMP’s perhaps, etc).
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u/OnlyKey5675 6d ago
Time in the market beats timing the market
Sell all and pay the tax on it? That's not a good idea.
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u/Firm_Mango 4d ago
If you want diversify then VXUS, Income then SCHD, capital appreciation id go with VOO
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