Over 50? 3 ETFs to Buy Now to Supplement Your Social Security Future

If you’re over 50, it’s probably time to start thinking seriously about retirement if you haven’t already. At this point, you may only have about ten more years of work ahead of you – or maybe less, depending on your exact age. And it’s important to understand the role Social Security will play during your senior years.

In short, you can expect Social Security to replace about 40% of your pre-retirement earnings if you bring home an average wage. If you’re a higher earner, however, then you may have even less replacement income than Social Security.

Now let’s talk about how much income you might need in retirement. If you expect to live a modest lifestyle, you may be fine if you are able to replace 60% to 70% of your regular pay. If you have big retirement goals, you may need 80% of 90% of your salary, or even 100%, to pull them off.

No matter what lifestyle you’re hoping and planning for in retirement, it’s pretty clear that you’re not going to get it with Social Security alone. So it is a good idea to keep investments that pay you on a regular basis.

With that in mind, here are three ETFs you may want to consider buying soon. Not only can they help you build more wealth for retirement, but they can also serve as a steady income once your career ends.

The JPMorgan Nasdaq Equity Premium Income ETF (JEPQ) is a good choice for investors with a good risk appetite. It invests in Nasdaq-100 companies, which means it is loaded with technology and other growth stocks that can be subject to volatility. As a hedge against this, JEPQ sells covered calls against its shares to generate income.

You may want to invest in JEPQ because it tends to generate higher monthly returns than other ETFs. That’s a good thing when you’re trying to boost your portfolio before retirement and supplement your Social Security during it. But if you are going to buy JEPQ shares, you may want to balance them with other funds that carry less risk.

The SPDR S&P 500 High Dividend ETF Portfolio (SPYD) tracks the S&P 500 High Dividend Index, which selects the 80 highest-yielding dividend stocks. If you’re looking for an ETF that generates income consistently, this could be a good bet, as the fund’s returns tend to outperform the broader market.

Also, unlike JEPQ, SPYD does not sell covered calls to generate income. By avoiding that strategy, SPYD opens the door to further capital appreciation.

If you like the idea of ​​an ETF that generates steady cash flow while opening the door to growth potential, SPYD might be a good bet. However, it is by no means a risk-free fund, as you are still investing in the stock market.

If you are over 50 and retirement is just around the corner, you may want to limit your risk exposure at this stage of life. And if so, it might pay to consider the Vanguard Total Bond Market ETF (BND).

The Vanguard Total Bond Market ETF (BND) holds US investment grade bonds, which are known to be much less volatile than stocks. And the steady income it provides can be a nice complement to whatever Social Security pays.

Of course, like all bond funds, BND still carries interest rate risk. But it is generally a much less risky option than funds like JEPQ and SPYD.

That said, if you still plan to work for a good number of years, BND may not offer enough growth for you. If you still want to buy it, you may want to combine it with a stock-focused ETF that offers more upside.

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