You Turn 73 and the IRS Makes You Take the Money. These 3 ETFs Turn Forced RMDs Into a Paycheck

You just turned 73, and the IRS has news: it wants its cut of the tax-deferred nest egg you spent decades building. Required Minimum Distributions are mandatory now, whether you need the cash or not. The trick is turning that forced withdrawal into something that feels less like a tax bill and more like a paycheck. Three ETFs do that job cleanly: the JPMorgan Equity Premium Income ETF (NYSEARCA:JEPI), the Schwab U.S. Dividend Equity ETF (NYSEARCA:SCHD), and the iShares 0-3 Month Treasury Bond ETF (NYSEARCA:SGOV). Together they cover monthly cash flow, dividend growth, and the safe parking spot where your RMD actually lives before it hits your checking account.

The RMD Problem, Simplified

At 73, the IRS forces you to withdraw a percentage of your traditional IRA every year. The tax hit is unavoidable. What is avoidable is the sloppiness that often surrounds it: reinvesting without a plan and paying tax on income you did not want, or leaving the proceeds in cash while inflation quietly erodes their value. The cleaner answer is a dedicated sleeve of your portfolio built specifically to generate predictable income. When that sleeve is functioning correctly, the RMD becomes the natural byproduct of an income machine running on schedule rather than a tax event you brace for every January.

JEPI: The Monthly Income Engine

JEPI blends large-cap U.S. stocks with equity-linked notes that sell call options, converting stock market volatility into monthly cash. The fund carries a 0.35% annual expense ratio, meaning roughly $9,965 of every $10,000 stays working for you. Assets stand at approximately $45.3 billion, keeping JEPI among the largest actively managed ETFs in the country. The trailing twelve-month dividend totals approximately $4.56 per share across 12 monthly distributions, and the fund currently yields around 8%. The most recent monthly payout, paid in October 2026, came in at $0.341 per share. Top holdings are spread across a defensive mix, with no single position exceeding 2% of assets. That diversification is precisely why JEPI can produce that level of income while still limiting the damage any one stock can inflict. The fund’s one-year total return, including dividends, has run near 7%.

SCHD: The Dividend-Growth Backbone

If JEPI is the paycheck, SCHD is the raise. The fund tracks the Dow Jones U.S. Dividend 100 Index, screening for companies with sustainable and growing payouts based on cash flow, return on equity, dividend yield, and five-year dividend growth rate. The expense ratio is effectively negligible at 0.06%, leaving roughly $9,994 of every $10,000 compounding for investors. Total net assets sit at approximately $110.6 billion as of early October 2026, making SCHD one of the largest dividend ETFs in the country by a wide margin.

After the most recent quarterly rebalance, Texas Instruments claimed the top spot at roughly 4.8% of the portfolio, followed by Qualcomm at around 4.4% and Procter & Gamble at approximately 4.3%. These technology and consumer staples names displaced the healthcare-heavy lineup that dominated earlier in 2026. (Note that SCHD completed a 3-for-1 share split in October 2024, so per-share figures are not directly comparable to pre-split data.) Distributions arrive quarterly, and the fund’s year-to-date total return has reached approximately 22%, well ahead of many income-oriented peers. That kind of principal appreciation gives your retirement portfolio a genuine chance to keep pace with the decades of draws ahead.

SGOV: The Safe Landing Pad

This is where the actual RMD lives once it clears the account. SGOV holds U.S. Treasury bills with maturities of three months or less, so its share price barely moves. Its assets have grown to approximately $114 billion as of early October 2026, a figure that reflects just how many investors treat it as a brokerage-account cash equivalent backed by a government-only mandate. The 0.09% expense ratio means nearly everything the T-bills earn flows directly to shareholders as monthly distributions.

The rate environment shifted notably in September 2026: the FOMC voted to raise the federal funds target range by 25 basis points to 3.75%-4.00%, the first hike since 2023, citing persistent inflation. SGOV’s 30-day SEC yield stands at approximately 3.7% as a result, generating real income on cash that would otherwise sit idle. Critically, this is the account you draw from for the IRS-mandated withdrawal, so you are never forced to sell JEPI or SCHD at the wrong moment to cover a deadline.

The Trade-Offs

None of this is free. JEPI’s covered-call overlay caps upside in strong bull markets, which is why its year-to-date price return trails the broader market by a wide margin and why its one-year total return sits in the single digits while the S&P 500 has run considerably higher. SCHD’s dividend fluctuates with its holdings, and share prices still fall in bear markets like any equity fund. SGOV’s yield floats entirely with short-term rates. The same fund paid roughly $0.44 or more monthly in mid-2024 when rates were at their peak, and the most recent monthly distribution came in around $0.30, reflecting the Fed’s cumulative rate moves since 2024. If the Fed continues tightening or holds rates higher for longer, that paycheck could stabilize or even grow slightly. If it pivots back to cuts, it will shrink.

Used together, though, these three funds address the RMD puzzle from three angles at once. JEPI writes the monthly check, SCHD grows the check over time, and SGOV holds the cash safely until the IRS wants its share. That is what turning 73 should feel like: your portfolio doing the work while you cash the paycheck.

Editor’s note: This article has been updated to reflect SCHD’s revised top holdings after the most recent quarterly rebalance, with Texas Instruments now the largest position at roughly 4.8%, displacing the prior healthcare-heavy lineup. SCHD’s assets under management and year-to-date return have been corrected to approximately $110.6 billion and 22%, respectively. JEPI’s trailing twelve-month dividend has been revised to approximately $4.56 per share, with the current yield updated to around 8% and the one-year total return corrected to approximately 7%. SGOV’s AUM has been revised to approximately $114 billion, and the Fed funds rate context has been updated to reflect the September 2026 FOMC hike to 3.75%-4.00%.

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