Social Security payments often fall short of covering full retirement expenses, with the average retired worker receiving about $2,000 monthly. Higher earners may receive larger benefits, but outside income is frequently necessary for comfortable retirement. High-yield ETFs can provide steady supplemental income. The JPMorgan Equity Premium Income ETF (JEPI) invests in large-cap U.S. companies and writes covered call options to generate premiums and ongoing revenue, producing distributable income while carrying a higher expense ratio as an actively managed fund. The SPDR Portfolio S&P 500 High Dividend ETF (SPYD) targets top-yielding S&P 500 stocks and concentrates in financials, utilities, and real estate, reducing diversification.
"The JPMorgan Equity Premium Income ETF (JEPI) has an interesting strategy that differs from other ETFs. It invests in large-cap U.S. businesses within the S&P 500. But it also writes call options against its holdings to generate more income and offer investors more upside. Funds that issue covered calls get to collect a premium for them, which generates ongoing revenue. That's income that can be shared with investors."
"Generally speaking, dividend ETFs can be a good choice for retirees because of the income they tend to generate. But the SPDR Portfolio S&P 500 High Dividend ETF (SPYD) employs a strategy that makes it a good pick. SPYD focuses specifically on the top-yielding stocks within the S&P 500 index. The fund has a heavy concentration on financials, utilities, and real estate, which means it's a bit less diverse than a broad income ETF."
Read at 24/7 Wall St.
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