Some experts believe investors need 10 times their income to comfortably retire. That’s an ambitious goal that’s difficult to reach regardless of income level. The Nationwide Risk-Managed Income ETF (NUSI) can help retirement investors get to exactly where they want to be.
NUSI can act as a complement to traditional equity and fixed income allocations or as the ideal protective hedge for investors with heavy exposure to technology and growth stocks because the fund is a “rules-based options trading strategy that seeks to produce high income using the Nasdaq-100 Index,” according to Nationwide.
“Experts at "Fidelity Investments":https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire say that to retire by age 67, you should have 10 times your income saved,” reports Elizabeth Gravier for CNBC. “That means if you earn $56,524 per year (the average yearly earnings of someone 55 years and older according to Q3 2020 data from the Bureau of Labor Statistics), you should theoretically have $565,240 saved by your 67th birthday, and some experts argue you should have at about double that.”
How the NUSI ETF Can Help Get You to Retirement
NUSI is an actively managed portfolio of stocks included in the Nasdaq-100 Index and an options collar. Per index rules, the fund only invests in the top 100 largest by market cap, nonfinancial stocks listed on NASDAQ. A collar strategy involves selling or writing call options and buying put options, thus generating income to hedge some downside risk. The strategy seeks to generate high current income monthly from any dividends received from the underlying stock and the option premiums retained.
“When planning how much money you will need in retirement, take the time to actually write down all your predicted spending so that you can properly assess the amount of cash it will take to afford the retirement lifestyle you want,” according to CNBC.
The Nationwide Risk-Managed Income ETF incorporates options exposure to help generate income and mitigate risk as a way to enhance total returns. Investors have long capitalized on covered call options strategies for income generation, or protective put options strategies to protect against and limit losses.
For more on income strategies, visit our Retirement Income Channel.