A 69-year-old couple with $850,000 in investable assets uses a pairing strategy to balance equity exposure and income stability in retirement. They allocate $400,000 to buffered S&P 500 ETFs that protect against the first 15% of market losses, while $450,000 goes into income-generating assets targeting a 7% yield, producing about $31,500 annually. This approach aims to limit downside risk while providing predictable income. Different yield levels affect the capital needed for income, with higher yields reducing capital but increasing risk of principal erosion. Buffered ETFs offer downside protection with capped gains, suitable for cautious investors seeking market exposure with controlled risk. Investors should assess spending needs and timing before committing capital to such strategies.
