For now, the issue is on the back burner given the contentious nature of this election cycle, but Social Security could look different in the months and years following the 2020 election, highlighting the importance of alternative income strategies, such as the Nationwide Risk-Managed Income ETF (NUSI).
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. NUSI is becoming all the more important in today’s climate.
“The 2020 presidential election could be a make it or break it moment for Social Security,” reports Lorie Konish for CNBC. “The reason: Social Security’s funding, already on the verge of running out, could reach that threshold sooner, thanks to the economic damage brought on by Covid-19.”
Consider NUSI Now
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.
“Democratic presidential nominee Joe Biden has emerged with a plan of his own. Broadly, it would boost benefits for low-income households while raising taxes on high earners,” according to CNBC.
No matter what income bracket retirees are in, NUSI is an important, income-generating consideration.
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.
The Nationwide Risk-Managed Income ETF uses an options trading strategy called a protective net-credit collar to generate income. The options strategy sells an upside call option and uses a portion of the proceeds received to buy a put option to hedge downside risk on an underlying portfolio of securities.
“Biden would increase the special minimum benefit, which was created to provide low-earners with adequate benefits. Biden calls for setting that figure at 125% of the federal poverty line. That would bring it to $1,301 from $886 a month as of 2019, according to an analysis by the Penn Wharton Budget Model at the University of Pennsylvania,” according to CNBC.