3 Income ETFs Every Boomer Should Own Before Age 70

Can your retirement portfolio survive two more 2022-esque inflation waves? If not, it’s a great idea to look into dividend ETFs with higher yields.

Turning 70 used to be the finish line for portfolio building, but with life expectancy stretching toward the eighties and healthcare inflation outpacing the CPI, the real race is making sure the checks outlive you rather than the other way around.

The sweet spot for soon-to-be retirees is no longer the 2% yield. The economy is volatile, and trade policies are being changed rapidly. And there’s a risk that the next administration will undo these changes and spark a decades-long tug of war that many portfolios may not survive.

Here are three income ETFs that can help your portfolio outlast a jittery market:

JPMorgan Nasdaq Equity Premium Income ETF (JEPQ)

The JPMorgan Nasdaq Equity Premium Income ETF (NASDAQ:JEPQ) is an actively-managed U.S. equity ETF that tries to give investors two things at once: exposure to the Nasdaq-100 and a much higher, monthly cash distribution than the index normally produces.

The ETF does this by combining a Nasdaq-100 equity sleeve and a covered-call overlay that sells one-month, slightly out-of-the-money call options on the Nasdaq-100 Index.

The premiums collected from the calls are paid out each month, together with any ordinary dividends the stocks happen to deliver. This creates the large distribution that the fund is known for.

JEPQ currently yields 9.38% and has an expense ratio of just 0.35%, or $35 per $10,000. This is quite cheap for an ultra-high-yield ETF.

The demand for options remains high due to record amounts of retail investors entering the market and experimenting with options. This keeps the premiums high for options, and JEPQ has been one of the biggest winners among ETFs year-to-date.

FlexShares International Quality Dividend Dynamic Index Fund (IQDY)

It’s a good idea to have some international exposure. FlexShares International Quality Dividend Dynamic Index Fund gets you exactly that, and it has been performing well.

This ETF corresponds to the performance of the Northern Trust International Quality Dividend Dynamic Index. It specifically looks to invest in international companies with high dividends and the cash flows to support them.

The dollar has been sliding in recent months, and this has led to the ETF delivering stellar results. IQDY is up 25% year-to-date against SPY’s 12.9% year-to-date gain.

IQDY also yields 6.12% and has an expense ratio of 0.51%, or $51 per $10,000.

The holdings are very diverse. The biggest holding is Taiwan Semiconductor Manufacturing Company (NYSE:TSM) at 2.5225%. No other holding has a >2% weighting.

Avantis International Small Cap Value ETF (AVDV)

Avantis International Small Cap Value ETF (NYSEARCA:AVDV) is an actively managed ETF that invests in small-cap companies outside the U.S. The fund holds a diverse portfolio of small stocks that trade at low multiples relative to their profits, with a profitability emphasis designed to limit exposure to value traps.

The fund is very diverse and has 1515 holdings, with the biggest sector being Industrials at 22%, followed by Materials at 17.43%. These foreign companies have done exceptionally well. The aforementioned decline of the U.S. dollar, plus surging gold prices, has lifted both industrials and materials stocks.

No one stock has a weighting above 1%, with the top holding (Mitsui Mining) at just 0.93%.

AVDV is the best-performing ETF in this list, even though the dividends aren’t as great. If you are more interested in raw performance, it’s worth looking into. AVDV is up 35.86% year-to-date, and it yields 3.29%. The expense ratio is 0.36%, or $36 per $10,000.