Four ETFs Offer a Regular Deposit for Retirement Planning

For individuals nearing retirement, the question of how much they can safely spend each month is a pressing concern. With a significant amount of savings accumulated over the years, the desire to turn that balance into a regular income stream is understandable. However, the traditional approach of relying on a 4% withdrawal rate may not provide the clarity needed for effective retirement planning. Four ETFs have emerged as alternatives, offering a regular deposit that can help answer this question.

Understanding the Classic 4% Rule

The 4% rule, which suggests withdrawing 4% of a diversified portfolio each year, has been a widely accepted guideline for retirement planning. However, this approach has its limitations. It is based on a projection rather than a guaranteed income stream, and it does not account for inflation or market fluctuations. As a result, many individuals are left wondering how much they can actually spend each month without depleting their savings.

Income-Tilted ETFs: A New Approach to Retirement Planning

Income-tilted ETFs, such as the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), the NEOS Nasdaq-100 High Income ETF (QQQI), the Global X U.S. Preferred ETF (PFFD), and the ProShares S&P 500 Dividend Aristocrats ETF (NOBL), offer a different approach to retirement planning. These funds focus on generating a regular income stream by writing covered-call options, layering index options, or investing in preferred shares.

How These ETFs Work

  • JEPQ: This ETF writes covered-call options on a portfolio of Nasdaq stocks, generating a regular income stream. The September 3, 2026 distribution came in at $0.68255 per share, with trailing 12-month payouts totaling $6.76379 per share.
  • QQQI: This ETF holds a similar Nasdaq-100 lineup and layers NDX index options on top, providing a tax-efficient income stream. The August 21, 2026 distribution paid $0.6518 per share, with $7.648285 per share over the trailing 12 months.
  • PFFD: This ETF invests in preferred shares from various issuers, providing a steady income stream. The distribution is a steady $0.10 per share per month, or $1.20 over the trailing 12 months.
  • NOBL: This ETF tracks the S&P 500 Dividend Aristocrats, companies with at least 25 straight years of rising payouts. The June 30, 2026 distribution came in at $0.303711 per share, with trailing 12-month payouts of $2.025885.

Benefits and Considerations

These income-tilted ETFs offer several benefits, including a regular income stream, tax efficiency, and a focus on generating cash flow rather than relying on a projection. However, it is essential to consider the trade-offs, such as capping upside in a strong market rally, eroding net asset values over time, and interest-rate sensitivity in preferred shares.

Retirement Planning Made Easier

Retirement planning doesn't have to feel overwhelming. By finding expert guidance and using the right tools, individuals can create a personalized plan that meets their needs and goals. SmartAsset's simple quiz can help connect individuals with a vetted financial advisor, making it easier to build the retirement they've always dreamed of.