"Five years from retirement is when you should stop caring about being clever and start being durable. You have a window where a perfectly reasonable plan can get wrecked by one ugly stretch in the market, and an uncomfortably large number of retirees are at risk."
"Many investors are doubling down on the growth rally without even knowing the consequences. They're buying S&P 500 and Nasdaq-100 ETFs for growth, and then buying covered call ETFs on both of the indexes for dividends. A stock market correction will be a disaster for their portfolios, and the capped upside of these covered call ETFs will make a recovery tough."
"The single biggest driver is what the market has been calling "the great rotation" out of growth and into value. Technology and the mega-cap AI darlings that dominated the last two years are struggling and are up just 0.5% year-to-date. When capital floods out of concentrated tech bets and into the broader value universe, an ETF like SCHD, which holds 100 top dividend-paying stocks screened for quality, benefits significantly."
The 2020s mark a significant retirement boom as Baby Boomers reach retirement age, requiring strategic portfolio adjustments. Investors within five years of retirement should prioritize durability over growth strategies. Many retirees risk portfolio damage by combining S&P 500 and Nasdaq-100 ETFs with covered call strategies, which cap upside potential during recoveries. Dividend-focused ETFs offer superior positioning. SCHD has demonstrated resilience, gaining 13.6% year-to-date in 2026 despite sideways performance from 2022-2025. This performance reflects the market's "great rotation" from concentrated technology positions into broader value stocks, benefiting dividend-paying equities.
Read at 24/7 Wall St.
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