Want Steady Retirement Income? Add This ETF to Your Portfolio and Do Nothing Else

JEPI NVDA There s a reason retirees are often advised to claim Social Security strategically. Those benefits are a guaranteed source of monthly income, so choosing the right filing age is key. But you re going to need more retirement income than Social Security alone can provide. So it s important to set yourself up with assets that pay you steadily over time. And the JPMorgan Equity Premium Income ETF (NYSEMKT: JEPI) fits the bill for retirees seeking ongoing income. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » The JPMorgan Equity Premium Income ETF isn t necessarily an optimal investment for people building wealth for retirement. But for retirees seeking income, it can be a great option. The fund invests in a portfolio of established, low-volatility companies to minimize risk. At the same time, it writes call options against its holdings that investors pay for. Those options generate income that the fund can then share with investors and distribute monthly. In other words, the JPMorgan Equity Premium Income ETF is not just your typical dividend ETF. Its covered call strategy allows it to generate more substantial yields. As a retiree, the one thing you really need is predictable cash flow without undue risk. The JPMorgan Equity Premium Income ETF fits the bill in both regards. Plus, it offers simplicity. Rather than build and manage a portfolio of individual dividend stocks, you can put your money into a single fund and reduce the time you have to spend keeping tabs on your investments. And with a net expense ratio of 0.35%, you won t lose a lot of money to fees with the JPMorgan Equity Premium Income ETF. In other words, for every $10,000 you invest in the fund, you ll spend $35 on fees. That s not negligible, but do remember that the JPMorgan Equity Premium Income ETF is an actively managed fund. Some ETFs simply track an index passively, so they re able to offer lower fees. But for an actively managed ETF, 0.35% is pretty competitive. While the JPMorgan Equity Premium Income ETF is a great option for retirees seeking steady income, it s important to know the risks. First, distributions are not guaranteed. The income generation by the fund s options premiums can fluctuate, so payouts aren t guaranteed to be the same month after month. In other words, don t look at this the same way as a Social Security check or bond payment, where the issuer is contractually obligated to pay you a certain amount of interest at different intervals. Secondly, the covered call strategy the fund employs limits its growth potential. During periods of broad market gains, the JPMorgan Equity Premium Income ETF may underperform S&P 500 or total stock market ETFs because it sacrifices some appreciation in favor of income. If you re in retirement, that may align with your strategy anyway. But it s an important thing to know about. Also, do remember that the JPMorgan Equity Premium Income ETF is subject to the same volatility as any stock you might own. Though it may be less volatile than other ETFs, it can still lose value during a significant market downturn. Finally, while the JPMorgan Equity Premium Income ETF could fit nicely into your retirement income strategy, you shouldn t necessarily make it your only investment. Even a diversified fund like this works best as part of a broad strategy that includes other assets and asset classes. But all told, if you re looking for steady retirement income without having to do a lot of work, the JPMorgan Equity Premium Income ETF could be a good fit for your portfolio. If you re like most Americans, you re a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we re all after. Many Americans leave money on the table in retirement. Learn more about these retirement strategies and more, available when you join Stock Advisor. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Want Steady Retirement Income? Add This ETF to Your Portfolio and Do Nothing Else was originally published by The Motley Fool

Want Steady Retirement Income? Add This ETF to Your Portfolio and Do Nothing Else

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