Displaying items by tag: income

Married retirees with an age or income gap can significantly reduce their Social Security tax bill in 2025 by delaying benefits and strategically using the new $6,000 Senior Deduction. For example, when the older spouse defers Social Security until age 70, it not only boosts lifetime income but also helps lower the couple’s current combined income, keeping more benefits tax-free. 

Roth IRA conversions during low-income years and Qualified Charitable Distributions (QCDs) after age 70½ are smart ways to cut taxable income without losing access to deductions. The Senior Deduction becomes especially powerful when couples keep their Modified Adjusted Gross Income (MAGI) under $150,000, the cap for eligibility. 

By timing withdrawals from IRAs to coincide with lower earning years and coordinating the younger spouse’s income, couples can avoid tipping into higher Social Security tax brackets. 

Finsum: A well-planned mix of benefit delays, tax-efficient withdrawals, and smart giving can make retirement income go further while keeping taxes in check.

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As expectations for interest rate cuts build, emerging market (EM) debt is drawing increasing attention from investors. Lower U.S. rates typically weaken the dollar, making EM currencies more attractive and boosting returns on dollar-denominated EM bonds. 

This favorable backdrop has already spurred strong demand, with EM bond issuance in Central and Eastern Europe, the Middle East, and Africa reaching $190 billion in the first half of 2025, on pace to break historical records. 

The Vanguard Emerging Markets Government Bond ETF (VWOB) offers investors a low-cost, diversified way to access this space, boasting a 30-day SEC yield of 5.66% and nearly 7% YTD return. As rate cut bets intensify into September, VWOB is positioned to benefit from both income and potential price appreciation. 

Finsum: For investors seeking EM exposure without the complexities of individual bond selection, ETFs offer compelling options

As of June 2025, the Federal Reserve has maintained its key interest rate, creating a rare window for investors to take advantage of elevated yields at the short end of the bond curve. 

With short-term yields currently exceeding those of intermediate maturities, ultrashort bond funds have emerged as an efficient way to earn income without assuming significant duration risk. These funds, which typically hold maturities under one year, offer a balance of liquidity, low volatility, and competitive returns. Among the top active strategies is Pimco’s Short-Term fund, which combines nimble credit allocation with disciplined risk management, avoiding complex securities and leaning on deep market expertise. 

For investors seeking tax-efficient income, Vanguard’s Ultra Short-Term Tax-Exempt fund delivers high-quality municipal bond exposure with an ultrashort duration, making it a smart pick in rising rate environments. 

Finsum: These strategies give investors a way to capture attractive yields while staying agile amid ongoing rate uncertainty.

Derivatives income ETFs are gaining traction as investors seek lower-risk equity exposure with higher income potential, especially in volatile or flat markets. These funds, like Goldman Sachs’ Premium Income ETFs (GPIX and GPIQ), generate income by writing call options, which sacrifices some upside in strong markets but cushions downside performance and produces consistent cash flow. 

This strategy offers “lower highs and higher lows” versus the broad market, making it appealing for those seeking stability and income outside traditional fixed-income vehicles. The funds use dynamic options coverage and diversified strike selection to balance income generation with capital preservation, typically covering 25–75% of the portfolio depending on market conditions. 

Additionally, they offer potential tax advantages through return of capital distributions, which delay tax obligations until shares are sold. 

Finsum: With steady distribution rates and independence from interest rate movements, these ETFs are increasingly attractive for retirement portfolios and income-focused investors.

With recession warnings growing louder, elevated bond yields are offering a compelling entry point for fixed income investors. During times of rising recession risk, bonds often shine as a defensive play—prices typically climb as demand surges and yields fall, making today's higher yields especially attractive to lock in. 

UBS highlights that quality, investment-grade bonds are offering strong yield potential without pushing investors into riskier territory. The Neuberger Berman Flexible Credit Income ETF (NBFC) stands out as one such vehicle, combining active management with multi-sector exposure to generate consistent income with reduced volatility. 

With a 7.10% 30-day SEC yield and over 350 holdings, NBFC delivers both competitive returns and cost efficiency, making it a strong candidate in today's income-hungry environment.

Finsum: Still, for those seeking more income and broader diversification, a mix of bonds and credit assets—like emerging market debt or private credit—can provide a powerful balance.