This High-Yield ETF Could Supplement Your Social Security Retirement Checks

There are millions of older Americans today who collect monthly benefits from Social Security. But for many retirees, Social Security just isn’t enough.

The average monthly benefit today is a little over $2,000. But while that may suffice in covering the basics for some retirees with low expenses, it’s certainly not enough for an enjoyable retirement.

A $2,000 monthly check, for example, leaves little money left over for leisure, travel, and the other things you may want to do once you’re no longer committed to a job.

That’s why it’s a good idea to invest in assets that can generate income to supplement your Social Security checks. And you have numerous options in that regard.

A common strategy for retirees is to build a portfolio of dividend stocks. However, not only does that take work, but it also requires you to keep tabs on your investments regularly.

Some people find that an easier way to generate portfolio income is to buy shares of the right exchange-traded funds, or ETFs, instead. After all, it’s easier to manage one investment than a collection of stocks.

If you’re looking for a great asset to provide income on top of Social Security, you may want to look at the JPMorgan Equity Premium Income ETF (JEPI). Let’s review JEPI’s strategy and why it may be a suitable investment for your retirement.

Why JEPI could be a good fit for your retirement portfolio

The JPMorgan Equity Premium Income ETF (JEPI) is an income-focused fund that’s ideal for investors who want stock market exposure and strong returns with less risk and volatility. JEPI focuses primarily on large-cap U.S. companies within the S&P 500 index — in other words, established businesses.

But JEPI doesn’t just hold a core group of stocks. Rather, there’s another component of the fund’s strategy — selling call options against its equity holdings.

Funds that sell call options get to collect a premium for them, and that’s what helps JEPI generate regular income for investors. In other words, other ETFs simply hold a bucket of stocks and hope they gain value or yield strong dividends. JEPI does the same, only on top of that, it employs its covered call strategy to generate steady income.

Is JEPI right for your retirement?

If you’re someone who’s extremely risk averse, then JEPI may not be the most suitable investment for you. Rather, JEPI is more optimal for investors who have a moderate tolerance for risk. But if your goal is to generate steady income to supplement your Social Security checks, it’s an asset worth looking at.

One nice thing about JEPI is that it distributes income to investors on a monthly basis. That consistently might help you better manage your expenses in retirement.

Finally, while JEPI carries some risk, it’s probably a less risky asset than, say, a growth ETF. In fact, JEPI isn’t necessarily a great choice for people who are in the process of building retirement wealth. It may be more suitable for people who are already retired, want steady income, and are willing to take on some risk, but not a whole ton of risk, to get it.