Retirement income has to do three jobs: pay the bills now, keep up with inflation, and last 25–30 years. These are the dividend and bond ETFs that do each job best, and three sample portfolios that combine them.
Updated October 13, 2026 · yields reviewed August 11, 2026 · Sample portfolios · Income per $100k
| Ticker | Role in retirement | Yield | Expense Ratio | Pays | Main risk |
|---|---|---|---|---|---|
| SCHD | Growing income | 3.89% | 0.06% | Quarterly | Sector tilts (energy, staples) |
| VIG | Growing income, inflation hedge | 1.85% | 0.05% | Quarterly | Low current yield |
| JEPI | High monthly income | 8.36% | 0.35% | Monthly | Capped upside, ordinary-income tax |
| DIVO | Income + quality stocks | 5.25% | 0.55% | Monthly | Concentrated (~25 stocks) |
| SPHD | Defensive income | 4.90% | 0.30% | Monthly | Lags in growth rallies |
| VYM | Broad dividend core | 2.45% | 0.06% | Quarterly | Moderate yield |
| SPYI | Tax-efficient high income | ~12% | 0.68% | Monthly | NAV erosion over long periods |
| BND | Stability, monthly interest | ~4.0% | 0.03% | Monthly | Interest-rate risk |
| SGOV | Cash reserve (1–2 yrs spending) | tracks T-bill rates | 0.09% | Monthly | Income falls if rates fall |
Trailing / distribution yields from recent fact sheets. They change with distributions and price; confirm current values before acting. Educational content — not personal investment advice.
Each portfolio pays income every month or quarter without selling shares. Yields are weighted averages of the funds' trailing yields above.
| Portfolio | Allocation | Approx. yield | Income per $500k / yr |
|---|---|---|---|
| Conservative early retirement worries, low risk tolerance | 25% SCHD · 15% JEPI · 10% SPHD · 35% BND · 15% SGOV | ~4.7% | ~$23,500 |
| Balanced most retirees | 35% SCHD · 20% JEPI · 10% SPHD · 25% BND · 10% SGOV | ~4.9% | ~$24,500 |
| Income-max shorter horizon, income over growth | 25% SCHD · 25% JEPI · 15% DIVO · 10% SPYI · 25% BND | ~6.0% | ~$30,000 |
The conservative and balanced mixes keep roughly half the portfolio in funds whose dividends have historically grown, which is what protects purchasing power in year 20. The income-max mix pays the most today but leans on option premium, which does not grow with inflation. Try your own weights in the portfolio builder.
| Blended yield | Annual income | Monthly income | Needed for $1,000/month |
|---|---|---|---|
| 3% | $3,000 | $250 | $400,000 |
| 4% | $4,000 | $333 | $300,000 |
| 5% | $5,000 | $417 | $240,000 |
| 6% | $6,000 | $500 | $200,000 |
| 8% | $8,000 | $667 | $150,000 |
Before tax. A 4–5% yield lines up with the classic "4% rule" withdrawal rate, with the difference that you live off distributions instead of selling shares. Run your own numbers with the dividend calculator.
There is no single best one. A durable retirement income portfolio usually combines a growing-dividend fund (SCHD), a higher-income fund (JEPI or DIVO), and bonds (BND or SGOV). Together they can yield 4.5–6% while keeping enough growth to outpace inflation over 25+ years.
Covered-call ETFs such as QYLD, XYLD, SPYI, and JEPQ pay 10–12% monthly. They suit a slice of a retirement portfolio, but on their own their share prices tend to lag over long periods, so the income may not grow with inflation. JEPI (~8%) is a more balanced monthly choice.
At a 4% blended yield you need about $300,000; at 5%, about $240,000; at 6%, about $200,000. Higher yields shrink the number but usually come with less growth, so many retirees plan around 4–5%.
They are diversified, which removes single-company risk, but not price risk: equity income ETFs can fall 20–30% in a bear market. Holding one to three years of spending in bonds or T-bills (BND, SGOV) means you never have to sell stocks at a low to cover expenses.
Funds paying mostly ordinary income (JEPI, JEPQ, REITs, bond ETFs) are best held in IRAs or 401(k)s. Funds paying mostly qualified dividends (SCHD, VYM, SPHD) are relatively tax-efficient in a taxable account.