The Simple Portfolios That Work in All Weather

Retirement investing isn't one-size-fits-all. This chapter compares two practical approaches: income-focused portfolios built from diversified ETFs, and a growth-first S&P 500 withdrawal strategy. Each has strengths, trade-offs, and best-fit scenarios. Use this guide to find the approach that matches your needs, risk comfort, and retirement stage.

Income Portfolio Strategies

The ETFs Used in Every Portfolio

All portfolios use the same five building blocks:

These five funds cover:

• U.S. stocks
• International exposure (via VTI's global components)
• Real estate
• Corporate bonds
• Inflation protection

They're low‑cost, diversified, and easy to automate.

Note: Keep fees low, keep behavior simple, and keep your savings rate consistent. That's where most of the results come from.

#### Why These ETFs

• Low cost: you keep more of your returns.
• Diversified: broad exposure reduces single‑asset risk.
• Reliable income + growth: consistent dividends and sensible growth trends.
• Easy to automate: simple to set and forget.

The 12 Portfolios

#### Portfolio Table

With the building blocks defined, here's how twelve portfolios come together to fit different needs and stages. Use this table as a heading and course — then adjust to your conditions.

📘 S&P 500 With a 3–4% Withdrawal Strategy

A growth‑first alternative to income portfolios

The S&P 500 withdrawal strategy is a simple, historically robust approach built around long‑term compounding rather than dividend income. Instead of relying on yield, the retiree withdraws a small percentage of the portfolio each year—typically 3–4%—while the remaining balance continues to grow.

• Invest primarily in the S&P 500 (or an equivalent total‑market index).
• Withdraw 3–4% per year to fund spending.
• Allow the rest of the portfolio to compound over time.
• Dividends are reinvested in total‑return math; withdrawals come from the whole portfolio.

• The S&P 500 has historically delivered strong long‑term returns, driven by price appreciation and reinvested dividends.
• Withdrawing 3–4% leaves enough growth to outpace inflation in most long‑term scenarios.
• Selling shares is not a failure of the strategy—it's part of the design.
• This approach avoids the slower growth and inflation drag common in income‑focused portfolios.

• Retirees who don't need high income today.
• People with bridge years before Social Security.
• Investors comfortable with market volatility.
• Anyone prioritizing long‑term growth, simplicity, and inflation protection.

• Pros: High growth potential, simple structure, strong inflation defense.
• Cons: Requires selling shares, higher volatility, less predictable cashflow than income portfolios.

A pure S&P 500 portfolio with a 3–4% withdrawal rate is a powerful, growth‑oriented retirement strategy. It's ideal for investors who want to maximize long‑term compounding, maintain flexibility, and rely less on portfolio income and more on total return.

Comparing Income Portfolios vs. S&P 500 Withdrawal

References & Data Sources

"ETF yields and growth rates are based on current fund data and long-term historical averages. See Schwab, Vanguard, and Morningstar for the latest figures."

— Schwab SCHD, Vanguard VTI, Morningstar

"Portfolio projections are estimates, not guarantees. Actual results will depend on market conditions, your savings rate, and your behavior."

— Stargazer Insights: Chapter Portfolios

• Schwab US Dividend Equity ETF (SCHD)
• Vanguard Total US Stock Market ETF (VTI)
• Schwab US REIT ETF (SCHH)
• Vanguard Intermediate-Term Corporate Bond ETF (VCIT)
• Vanguard Short-Term Inflation-Protected Securities ETF (VTIP)

• Morningstar ETF Data
• Portfolio Visualizer: Asset Class Returns
• ETF.com: ETF Analytics