SCHD Inflation Calculator
Measure how SCHD dividends can protect your investment against inflation over time
The SCHD Inflation Calculator helps you analyze how investments in Schwab U.S. Dividend Equity ETF (SCHD) can potentially offset the effects of inflation. This tool projects your dividend income growth compared to inflation rates to show the real purchasing power of your investment over time.
Investment Details
How much you plan to invest initially
Additional amount you’ll invest each month
How many years you plan to keep investing
Current price as of May 2025
Dividend & Inflation Settings
SCHD’s recent annual dividend per share
SCHD’s 10-year dividend CAGR is approximately 9.33%
Historical U.S. inflation averages around 3% annually
Inflation Protection Results
Enter your investment details and click “Calculate Inflation Protection” to see results.
Understanding SCHD as an Inflation Hedge
Why Consider SCHD for Inflation Protection?
SCHD (Schwab U.S. Dividend Equity ETF) is an ETF that tracks the Dow Jones U.S. Dividend 100 Index which consists of high dividend yielding stocks that have a track record of paying dividends on a regular basis. Companies that consistently increase their dividends usually have the financial stability and pricing power to withstand inflation.
While no investment can guarantee it will always beat inflation, SCHD’s historical dividend growth rate is higher than the average inflation rate, which means investors can potentially earn an increase in real income over time.
SCHD’s Historical Performance Against Inflation
Since SCHD was launched in 2011, it has demonstrated impressive dividend growth performance that generally beats inflation. The average annual dividend growth rate was 9.33 percent, which is considerably higher than the average U.S. inflation rate of about 2-3% during the same period.
This positive relationship between dividend growth and inflation makes SCHD a potentially effective method of preserving purchasing power over long periods. The compounding effects of this difference can be significant across multiple decades.
Benefits of SCHD as an Inflation Hedge
- Growing Income Stream – SCHD focuses on companies with regular dividend growth which can help investors maintain income that historically outpaces inflation.
- Quality Companies – The ETF selects companies with strong financial health and competitive advantages that can often pass inflation costs to consumers.
- Diversification – With approximately 100 holdings across different sectors, SCHD provides diversified exposure to inflation-resistant companies.
- Low Expenses – The low expense ratio of 0.06% ensures more returns stay with investors, maximizing inflation protection benefits.
- Reinvestment Option – Reinvesting dividends can amplify compounding effects, potentially resulting in even greater inflation protection over time.
Considerations and Limitations
- Market Risk – Even dividend-focused ETFs like SCHD are subject to market volatility and can lose value during market downturns.
- Dividend Growth Variability – While SCHD has historically grown dividends above inflation, future growth rates are not guaranteed and can vary.
- Inflation Spikes – During periods of unusually high inflation, even SCHD’s dividend growth might not keep pace with rapidly rising prices in the short term.
- Time Horizon – SCHD’s inflation protection tends to be more effective over longer periods when dividend growth can compound.
- Tax Considerations – Dividends are taxable in non-retirement accounts, which can reduce their effectiveness as an inflation hedge based on your tax situation.