A pivotal part of the retirement income-generating and planning equation is setting realistic goals, but it’s common for investors and retirees to want more than is practical. Wanting more usually requires more income, something the Nationwide Risk-Managed Income ETF (NYSEArca: NUSI) is designed to accomplish.

NUSI can act as a complement to traditional equity and fixed income allocations or as the ideal protective hedge for investors with heavy exposure to technology and growth stocks because the fund is a “rules-based options trading strategy that seeks to produce high income using the Nasdaq-100 Index,” according to Nationwide.

In an effort to plug retirement income gaps, investors should consider factors such as family size, home equity, income levels and more.

NUSI is an actively managed portfolio of stocks included in the Nasdaq-100 Index and an options collar. Per index rules, the fund only invests in the top 100 largest (by market cap) nonfinancial stocks listed on NASDAQ. A collar strategy involves selling or writing call options and buying put options, thus generating income to hedge some downside risk. The strategy seeks to generate high current income monthly from any dividends received from the underlying stock and the option premiums retained.

NUSI Is Practical, Realistic

“Replacement rates only use employment earnings to determine a standard of living. While earnings are a vital factor in measuring future income, it’s not the sole factor,” according to Plan Adviser.

Covered call strategies such as NUSI can potentially augment a portfolio during periods of heightened volatility. The covered-call options allow an investor to hold a long position in an asset while simultaneously writing, or selling, call options on the same asset. However, the strategy isn’t free of risk.

NUSI Chart

NUSI data by YCharts

A covered call refers to an options strategy where an investor writes or sells a call option on an asset which they already own or bought on a share-for-share basis to generate income via premiums derived from the sale of the call options. However, the covered call strategy caps upside potential and provides limited downside protection, so it is ideal for investors with a neutral-to-bullish outlook. NUSI can also help advisors with some important tasks.

“A first step financial advisers should take when projecting retirement income is calculating current living expenses. Determine how much money workers are spending today and compare that with how much they can spend in retirement,” reports Plan Adviser.

For more on income strategies, visit our Retirement Income Channel.