Social Security is projected to be insolvent by 2034, leading to potential benefit cuts for retirees. To offset this, many retirees are turning to portfolio income. Two high-yield ETFs, Fidelity Enhanced High Yield (FDHY) and FT Vest S&P 500 Dividend Aristocrats (KNG), offer diversification and income through bonds and dividend stocks with covered call options.

Fidelity Enhanced High Yield ETF (FDHY) is actively managed, focusing on high yield, below investment grade bonds, with an average yield of 6.61%. FDHY holds a minimum of 80% junk bonds, providing monthly dividend payments and a Silver rating from Morningstar. The ETF has solid performance metrics and a focus on managing default risk.

FT Vest S&P 500 Dividend Aristocrats Target Income ETF (KNG) tracks Dividend Aristocrat Fortune 500 stocks with a covered call component, offering a dividend yield of 7.98%. With 138 holdings and total assets of $3.458 billion, KNG aims to provide higher annual dividends through its covered call option strategy, making it an attractive option for income-focused investors.

First Trust, the company behind KNG, was founded in 1991 and offers a range of ETFs popular with individual investors due to its customer service-focused approach. Dividend Aristocrat stocks have a history of consistent dividend increases for over 25 years, indicating strong business models and management. KNG utilizes a covered call option strategy to enhance returns, making it a unique and potentially lucrative investment option.

Retirement planning is crucial as Social Security faces insolvency by 2034, potentially leading to benefit cuts. By considering high-yield ETFs like FDHY and KNG, retirees can supplement their income and mitigate the impact of potential benefit reductions. Planning for retirement involves understanding the difference between accumulating and distributing wealth, making informed investment decisions, and potentially retiring earlier than expected with the right financial strategy.

Read more at Yahoo Finance: If You Have These ETFs, Social Security’s Insolvency Probably Doesn’t Matter