Last month, I made the boldest move of my investing life—one that probably made every financial advisor cringe. I sold every single bond in my portfolio. Gone. Poof.
Instead, I replaced them with just two ETFs that could realistically shave 5 years off my retirement timeline. Before you think I’ve lost it, let me explain exactly why this worked… and why it might work for you too.
The Wake-Up Call: Bonds Are Failing Me
I was reviewing my portfolio last year, feeling smug about my conservative allocation. A healthy chunk in bonds? Check. Stability and income? Check.
Then reality hit. My bonds were barely keeping up with inflation. In some cases, they weren’t even doing that. 😳
With Federal Reserve interest rate swings turning the bond market into a rollercoaster, the reality is harsh: even a “good” bond return of 2–3% annually can’t compete with rising living costs.
I did the math. At my current pace, I’d be working well into my 70s, maybe even beyond. That’s when it hit me: playing it safe was the riskiest move of all. I was risking my freedom, my time, and my chance to enjoy life while I’m healthy.
Something had to change.
Meet My Retirement Game-Changers: SCHD & VYM
1️⃣ SCHD – Schwab US Dividend Equity ETF
SCHD isn’t just another dividend fund—it’s a high-performance income machine managing $72.2 billion in assets with a dirt-cheap 0.06% expense ratio.
Yield: 3.8%
Holdings: 103 of the strongest dividend-paying companies
Top names: Chevron, Home Depot, PepsiCo, Altria
Sector allocation: Defensive-heavy—energy, consumer staples, healthcare
Over the past 5 years, SCHD delivered a 7.45% annualized return, more than double what most bond strategies achieve.
2️⃣ VYM – Vanguard High Dividend Yield Index ETF
While SCHD plays it safe, VYM went full throttle in 2025: a staggering 10.65% return.
Assets under management: $79.5 billion
Expense ratio: 0.06%
Holdings: 583 dividend-paying companies across the market
Top 10 holdings: Only 26% of the portfolio—diversification at its finest
5-year annualized return: 11.08%
Imagine this: $100,000 in bonds 5 years ago? ~$116,000 today. Same $100,000 in VYM? ~$168,000. In SCHD? ~$143,000. Tens of thousands more in your pocket just by making this strategic shift. 💰
Why This Strategy Could Accelerate Your Retirement
Higher Returns: SCHD + VYM blow bonds out of the water in 5-year performance.
Dividend Growth: Unlike bonds, dividends often grow over time, hedging against inflation.
Tax Efficiency: Qualified dividends are taxed at lower rates than bond interest.
Flexibility: Adjust allocations between SCHD (income) and VYM (growth) depending on your stage in life.
Quarterly Cash Flow: Regular distributions can be reinvested or used for living expenses.
With the Fed expected to cut rates, dividend ETFs are likely to outperform bonds even more. This combo could realistically shave 5 years off your retirement timeline.
The Risks You Need to Know ⚠️
Market Volatility: These are equity-based ETFs. Expect swings.
Dividend Cuts: Dividends aren’t guaranteed. Companies can reduce them in tough economic conditions.
Interest Rate Sensitivity: Rising rates could temporarily impact dividend stock performance.
But here’s the thing: the risk of staying in bonds—working longer than you want—is far greater than these risks.
My Bottom Line
Selling all my bonds and replacing them with SCHD and VYM changed my retirement game. I now have current income + long-term growth, a combo bonds simply cannot offer in today’s market.
If you’re tired of your bond portfolio barely keeping pace with inflation while your retirement keeps slipping away, it’s time to consider a smarter strategy. Sometimes, the biggest risk is playing it too safe.
Ready to Make Your Move?
Invest in these ETFs today with Moomoo and take control of your financial future: Start Investing Now ✅
#InvestSmart #EarlyRetirement #DividendETFs #FinancialFreedom #SCHD #VYM #MoomooInvesting
