Author Topic: Low volatility qualified dividends?  (Read 1881 times)

father time

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Low volatility qualified dividends?
« on: May 02, 2024, 01:44:47 PM »
I am projecting my ER taxable ordinary income to be around 80K.  In a perfect world, I would like to fund the rest of my living expenses with qualified dividends and pay zero tax by staying below the income threshold where the 15% rate kicks in.  The obvious drawback is that generally speaking, assets that produce qualified dividends are more volatile than an investment that produces ordinary income.  I'd appreciate any recommendations for low(ish) volatility assets that pay a decent (4+%) qualified divvy.   

MustacheAndaHalf

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Re: Low volatility qualified dividends?
« Reply #1 on: May 03, 2024, 02:34:37 AM »
For filing status single (you said "I" consistently), earning $80k/year puts your dividends in the 15% bracket.  Long-term capital gains get taxed at the rate where your income stops, not from $0.

Of the large dividend ETFs, Schwab U.S. Dividend Equity ETF (SCHD) offers a good combination of low expense ratio (0.06%) and higher dividend yield (SEC 30 day yield 3.87%).
https://www.schwabassetmanagement.com/products/schd

father time

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Re: Low volatility qualified dividends?
« Reply #2 on: May 03, 2024, 07:58:55 AM »
Thanks.  The "I" was imprecise.  MFJ

Financial.Velociraptor

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Re: Low volatility qualified dividends?
« Reply #3 on: May 03, 2024, 08:26:43 AM »
Google turned up this (https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=SPHD) on a search for Low Beta High Dividend Fund.  ER is a little high at 0.3% but not outrageous.  Current yield is a little over 4.25%. 

It has options so if you are concerned about the risk of moving some bond to equity, you could hedge with an out of the money put or use a collar for tighter protection.