Lifetime Income: S&P500 Plus Index Options

This month’s analysis is an interesting twist on the constant payout strategy I covered last month.  Last month’s strategy consisted of putting all capital in S&P500 ETF’s, and drawing out a constant amount each year.  This provides a fixed annual payout for as long as the capital lasts.

In this month’s strategy, all capital is again invested in S&P500 ETF’s, and a constant amount is withdrawn each year.  However, a portion of the withdrawn amount is invested in 12-month call options on the S&P500 ETF.  If these options are in the money at the end of the year, the value is available for additional spending.  If the options are not in the money at the end of the year, the amount available for spending is reduced by the amount that was spent on the options.

If there are investment topics you’re interested in that I haven’t covered yet please send me an email:


joseph AT