Retirement should be about freedom and confidence, not anxiety. One of the most effective ways to create both is to own dividend-paying ETFs that deliver consistent cash flow, broad diversification, and professional management. These income-focused funds have surged in popularity among retirees and near-retirees precisely because they don’t require you to constantly sell shares to fund your lifestyle. Instead, dividend-paying ETFs turn your portfolio into a dependable income engine, and one that keeps working for you whether markets are calm or choppy.
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But let’s take a step back and ask why this is important.
After spending years building up your nest egg, you want to step into the retirement you deserve — whether that means relocating to a dream destination, traveling more, spending more time with family, or simply enjoying the comfort of your finances.
What you don’t want is constant stress about market swings, inflation quietly eroding your purchasing power, or the fear of outliving your savings. You also don’t want to live on the scant 0.6% from your average savings account.
Collect 3.38% Every Quarter
One way to do that is by investing in a safe, high-yielding exchange traded fund (ETF), like the Schwab U.S. Dividend Equity ETF (NYSEARCA: SCHD). With an ultra-low expense ratio of 0.06%, the SCHD ETF tracks the total return of the Dow Jones U.S. Dividend 100 Index. The fund currently holds 101 dividend-paying stocks, including blue-chip names such as Bristol Myers Squibb (NYSE: BMY), Merck & Co. (NYSE: MRK), ConocoPhillips (NYSE: COP), Lockheed Martin Corp. (NYSE: LMT), Chevron (NYSE: CVX), Verizon Communications Inc. (NYSE: VZ), and Cisco Systems (NASDAQ: CSCO).
SCHD pays a quarterly dividend, making it a reliable source of regular income. It last paid out just over 27 cents per share on December 15. Before that, it distributed just over 26 cents per share on September 29 and just over 26 cents per share again on June 30. That kind of consistency is exactly what retirees need when planning monthly expenses.
The ETF is also up about 15% since the start of the year after a lackluster 2025. This is a reminder that dividend-paying ETFs can offer growth potential alongside income.
High Standards, Built-In Stability
What really sets SCHD apart from other dividend-paying ETFs is its strict eligibility criteria. To even be considered for inclusion, a company must have at least 10 consecutive years of dividend payouts, a market cap of no less than $500 million, and an average three-month daily trading volume of at least $2 million. In short, the ETF doesn’t accept any slouches. SCHD also favors companies carrying little to no debt, adding an extra layer of stability that matters when volatility picks up.
This disciplined, rules-based approach is one reason SCHD has earned a strong reputation among investors who prioritize quality over yield-chasing. Many dividend-paying ETFs simply sweep up the highest yields available without regard for financial health — SCHD takes the opposite approach, screening for durability first.
The SCHD ETF Will Rebalance in March
In just weeks, the SCHD ETF will also undergo its annual rebalancing. This time around, it’s again expected to rotate out of stocks with compressed yields and into stocks with higher yields, which should include stocks in the financial and healthcare sectors.
For investors keeping an eye on dividend-paying ETFs heading into the spring, this rebalancing could create a timely entry point. It offers a strong alternative. Owning a high-quality dividend ETF like SCHD can be a powerful step toward turning your hard-earned nest egg into lasting financial security.
A Smarter Alternative to Your Savings Account
The SCHD ETF has proven to be a reliable choice for those seeking income, stability, and long-term growth. And it provides all of that in a single, low-cost fund. For investors who want to replace the unreliable interest of a savings account with a consistent quarterly paycheck, without taking on excessive risk, SCHD offers a compelling alternative.
Owning a high-quality dividend-paying ETF like SCHD can be a powerful step toward turning your hard-earned nest egg into lasting financial security — and the kind of retirement you’ve actually been working toward.
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