"Very few have the ideal amount needed to maintain a comfortable lifestyle while being retired. Advisors say you need 70-80% of your pre-retirement income as a rule of thumb before you retire. Let's say you make $40,000 per year after tax. If your portfolio gets you a 3% yield, you need $1 million to earn $30,000 a year. Very few retirees have that amount."
"The inflation spike since 2022 has given retirees a taste of how quickly prices can rise. Many are already in a pinch, and their retirement portfolios don't generate enough income to make up for inflation. As such, putting some money aside into higher-yield ETFs is not a bad idea. If your portfolio is $500k, a 3% yield will get you $15,000. But if you put aside a quarter of that into some ETFs with an average yield of 10%, you will get $23,750."
Many retirees lack the assets to replace the 70-80% of pre-retirement income commonly recommended. Low-yield portfolios (around 3%) require very large balances to generate sufficient annual income. Inflation since 2022 has reduced purchasing power and increased pressure on retirement portfolios. Allocating a portion of savings to higher-yield ETFs can materially increase income; for example, reallocating 25% of a $500k portfolio into 10%-yielding ETFs raises overall income from $15,000 to $23,750. SonicShares BOAT, NEOS IWMI, and Invesco PDBA provide higher yields but introduce greater risk and require careful consideration.
Read at 24/7 Wall St.
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