These Income ETFs Can Meet — & Exceed — Retiree Needs

Core Insights - A significant wave of Baby Boomer retirements is occurring, with many individuals lacking the expected financial assets for retirement [1] - The 2008 Financial Crisis and rising costs, including post-pandemic inflation, have adversely affected Boomers' retirement plans [1] Income ETFs - The rise of income ETFs, particularly covered call ETFs, provides a solution for investors seeking current income while maintaining equity exposure [2] - Covered call ETFs can limit upside potential but offer a combination of income and capital appreciation, appealing to those nearing retirement [2] Strategy Comparison - Not all covered call ETF strategies are equal; traditional monthly options can restrict upside if equities rally past the strike price [3] - Daily covered call ETFs aim to provide higher income and better market participation by utilizing options that expire daily, overcoming limitations of monthly strategies [4] Example of Income ETF - The ProShares S&P 500 High Income ETF (ISPY) exemplifies a successful strategy, targeting high income and S&P 500 returns with a 55 basis point fee, achieving a 12.2% year-to-date return and an 8.7% 12-month distribution rate as of November 30 [5] Future Outlook - As economic volatility persists, income ETFs, especially covered call solutions like ISPY, are positioned to support investors, particularly those nearing retirement, by providing meaningful equity exposure [6]