2 High-Yield ETFs That Could Supercharge Your Retirement Income

Achieving a comfortable retirement goes beyond just relying on government benefits. While Social Security can serve as a basic financial foundation, the average monthly benefit of $1,976 often falls short for many people seeking a fulfilling lifestyle in retirement. Because of this, many retirees need to explore additional sources of income to secure their financial future.

Wise investors recognize the value of building multiple income streams during retirement. This strategy is vital as traditional pension plans become less common and market fluctuations introduce uncertainty. Thankfully, exchange-traded funds (ETFs) provide a robust option for generating steady income while keeping capital safe for long-term growth.

Explore Global Dividend Potential

The Vanguard International High Dividend Yield ETF (VYMI) focuses on foreign firms that offer above-average dividend payments. With a current yield of 4.85%, this fund boasts an expense ratio of just 0.22%, which is significantly lower than the average 0.97% charged by many competitors in the same category.

The fund has a solid five-year track record that showcases its ability to provide both income and growth. Although its average annual return of 5.85% since 2019 lags behind the S&P 500, the combination of appealing dividend payments and respectable capital appreciation makes it a worthwhile addition to retirement investment strategies.

This ETF also offers global diversification, which can add stability to retirement planning. By investing in international markets, you can reduce reliance on the U.S. economy while capitalizing on worldwide income opportunities.

Currently, international stocks are trading at considerable discounts compared to their U.S. counterparts. This difference in valuations presents a unique opportunity for investors interested in income prospects and potential capital growth. While U.S. stocks are often at high valuations, many international businesses remain solid yet undervalued, providing a safety margin for long-term investors.

Generate Enhanced Income via Options

The JPMorgan Equity Premium Income ETF (JEPI) adopts an innovative income-generating strategy. This ETF blends investments in blue-chip U.S. companies like Amazon, Mastercard, and Nvidia with options trading to provide monthly income. The fund currently yields an impressive 7.33%.

Even though it is actively managed, it maintains modest costs with an expense ratio of 0.35%. Since its launch in 2020, this fund has recorded a solid appreciation of 15.9% while consistently distributing monthly income payments. When considering total returns—including dividends and assuming reinvestment—the JPMorgan Equity Premium Income ETF has achieved a remarkable 73% since inception.

The strategy of combining quality equities with income from options premiums gives retirees an appealing mix of growth and consistent cash flow. This balanced method helps guard against market downturns and inflation risks that could deplete retirement funds.

Effective Passive Income Solutions

Both the Vanguard International High Dividend Yield ETF and the JPMorgan Equity Premium Income ETF offer diverse strategies to tackle the challenge of retirement income. Their solid performance histories and professional management make them strong candidates for those seeking alternatives to conventional income sources.

The combination of the Vanguard ETF's global reach and JPMorgan's options-enhanced approach provides distinct benefits tailored to various market conditions. The international ETF opens the door to undervalued global stocks with desirable yields, while the income-focused ETF ensures regular cash flow through its innovative options overlay strategy.

Together, these funds illustrate how modern ETF strategies can effectively supplement Social Security benefits to meet retirement income needs. By integrating both approaches, investors can cultivate a diversified income stream that utilizes global opportunities alongside the reliable cash flow generated from options trading in the U.S. market.

retirement, income, ETFs