How Much You Need in These 3 Monthly Dividend ETFs to Double the Average Social Security Check

To double the average Social Security check, which is around $2,071 per month, one would need to generate approximately $4,142 per month, or close to $49,700 per year, from a separate income source. There are three monthly-paying ETFs that could help achieve this goal: JPMorgan Equity Premium Income ETF (JEPI), JPMorgan Nasdaq Equity Premium Income ETF (JEPQ), and Virtus InfraCap U.S. Preferred Stock ETF (PFFA). Each fund uses a different approach to generate income.

JEPI utilizes index call options on top of equity portfolios and passes the premium through as monthly distributions. JEPQ employs a similar strategy but with a tech-heavy underlying portfolio, allowing for richer call premiums and higher distributions. PFFA, on the other hand, holds preferred securities and adds borrowed capital to boost the payout. The three funds offer varying yields and principal requirements, each with its own risk profile.

JEPI has an equity sleeve that is deliberately lower in volatility than the index itself, with a focus on a defensive basket of U.S. large caps. The fund pays roughly $4.40 per share annually, giving it a yield of about 7.6%. To generate the income target, an investor would need to hold approximately $650,000 in JEPI. However, the fund's upside may be capped by the call writing strategy, and distributions can vary.

JEPQ offers a higher yield of around 14% and a larger principal requirement of $351,000 to produce the same income target. This fund is concentrated in tech stocks, which can bring higher implied volatility and associated risks. The monthly payouts have been increasing, but they could compress in a bear market, and the principal value may fluctuate more than that of JEPI.

PFFA, the odd one out among the three, holds preferred securities issued by various entities and applies modest leverage to increase the payout. The fund's income is driven by rate and credit-driven factors, making it less reliant on equity volatility. PFFA currently has a yield of close to 10% and requires about $501,000 to double the average Social Security check. The fund's stability comes from its diverse sources of income, but it also faces cyclical risks associated with financials and REITs.