Two Schwab ETFs That Deliver Big Passive Income for Retirees

"As you shift gears into retirement, you're going to want passive income to cover necessities and other expenses. One way to achieve this is by investing in dividend ETFs. Dividends are payments companies make to their shareholders out of their profits. But rather than picking dividend-paying stocks yourself, dividend ETFs are professionally managed funds that invest in sometimes hundreds of dividend paying stocks. And two dividend ETFs have long stood out for their dividend muscle. They are brought to you by Schwab, one of the biggest brokerages in the country. So let's take a closer look at these dividend powerhouses."

"The Schwab U.S. Dividend Equity ETF (SCHD) focuses on high-quality, large-cap stocks with a steady record of dividend payments. It aims to mimic the total return of the Dow Jones U.S. Dividend 100. This index focuses on the quality and sustainability of dividends. SCHD has an impressive SEC 30-day yield of 3.88%. The fund's main holdings are based in sectors like energy, consumer staples, and healthcare. These are known as defensive or safe haven sectors that are often seen as resilient even in times of economic turmoil."

"The ETF's holdings include large-cap stocks like PEPSICO INC ( NASDK:PEP), CHEVRON CORP ( NYSE: CVX) and ABBVIE INC ( NYSE: ABBV). Large-cap stocks are associated with companies deemed to be financially stable. In fact, Schwab selects stocks in this ETF based on fundamental strength relative to their peers. Moreover, SCHD carries an ultra low expense ratio of 0.060%. That equates to just $6 for every $10,000 invested annually. And the fund has about $71.55 billion in net assets."

Dividend ETFs provide passive income by pooling many dividend-paying stocks into professionally managed funds. The Schwab U.S. Dividend Equity ETF (SCHD) targets high-quality, large-cap U.S. stocks with steady dividend records and tracks the Dow Jones U.S. Dividend 100, offering a 3.88% SEC 30-day yield. SCHD emphasizes defensive sectors such as energy, consumer staples, and healthcare and holds names like PepsiCo, Chevron, and AbbVie. SCHD charges a 0.060% expense ratio and manages roughly $71.55 billion in assets. Complementary international dividend exposure is available through Schwab's international dividend ETF to enhance diversification.

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