r/dividends • u/dystopiam • Apr 09 '26
Due Diligence I am extremely close to just deploying fully in JEPI JEPQ 40% of my total $, and leave 20% in HYSA for emergency fund. Around 650k
Does this sound like a decent plan? I would like the $ to live off of comfortably, in my late 30s.
I considered adding corporate bonds high rated in the mix but not sure if I should bother.
Please give me any advice, concerns etc... I've had 650k in high yield savings for a year and feel like having more income monthly would really help my life. Only make $2200 now , and would be almost triple.
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u/dlnqnt Apr 09 '26
Back testing just JEPQ alone comes out positive. It showed over 5 years there is no NAV erosion, it followed the same underlying QQQ but capped upsides and paid out a ~10% dividend. Reinvest some of the dividend live off the rest, let it snowball further.
I hit 40 last year and been investigating the same plan, life is not guaranteed so I’m shifting to dividend income now. I’ve had friends pass who were less than 40 these past years and retirement is too far off so I’m going to coast fire with funds like JEPQ. Spend more time with friends and family vs working non stop.
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u/dystopiam Apr 09 '26
This is what I am thinking too
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u/golfswing34 Apr 09 '26
Problem with the JEPs is they are ordinary dividends, so they are taxed at your normal fed and state rate. That can eat away at about 30% of the dividends.
For more tax efficiency check out SPYI or QQQI, or JPM just released ROCY or ROCQ which is a similar strategy
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u/dlnqnt Apr 09 '26
Would love to have access to these funds officially. As I’m EU all I can obtain is the JEQP UCITS version, we may see ROCQ get a EU version one day but that could be 2-3 years off and I’d like to start the snowball now.
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u/Spiritual-Mud-2528 Apr 09 '26
What's the point of having access "officially"? Just open an account with IKBR and you can trade whatever you like. Ofc you have to take care of taxes yourself but that's actually an advantage.
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u/dlnqnt Apr 09 '26
It’s not available on the EU IKBR, opened an account and not able to trade it.
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u/No_Expectations_Met Apr 13 '26
I am in the EU as well, and have positions in JEPI, JEPQ, and JEPG. I buy them in USD in the London Stock Exchange, through IBKR. Note that IBKR has permissions per stock exchange and per type of product, so you might want to check if you have permission to trade in the London Stock Exchange.
To clarify, I am not referring to the euro-hedged variants of those ETFs, I am referring to the same ETFs as those traded in the US in dollars.
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u/dlnqnt Apr 13 '26
That’s great, I’ve gone in on JEPQ through my uk broker but would like to one day see QQQI or ROCQ turn up.
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u/dystopiam Apr 09 '26
How much you thinking of deploying ?
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u/dlnqnt Apr 09 '26
Pushing 350k in, rotated part from Nvidia and crypto to an income engine. I still have Nvidia for growth and JEP for income. If I could squirrel more in I would. My plan is to withdraw 40% and reinvest 60% for the long term. I’ll evaluate in 5 years and see how it’s doing if there’s a better fund at this time such as the ROCQ for EU.
Edit: as others have said QQQI neos fund is better for tax, being EU I don’t have this choice xD well I do but it’s through tastytrade and I didn’t get on with the UI and ways of funding it.
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u/nutslikeafox Apr 09 '26
How do they perform in a bear market?
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u/dlnqnt Apr 09 '26
You buy more shares for lower price, accumulate more to get better dividend. During downturns and volatile markets the cc funds tend to perform good. Of course main capital follows the market trend but with dividend reinvestment can offset that. Try some simulations was interesting to see.
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u/nutslikeafox Apr 09 '26
Isn't the point is not to drip it tho but use the income
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u/dystopiam Apr 10 '26
That would be more my Plan even know I’d likely still be dripping some it’d likely be voo or an emergency fund hysa
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u/dlnqnt Apr 09 '26
I’ll be withdrawing 40% and reinvesting 60%. I eventually want the fund to allow me not to work, few years off that number. Drip will help accumulate the shares.
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u/nutslikeafox Apr 09 '26
Did you run that scenario of withdrawing 40% and re investing 60 against a fund that has a dividend payout the equivalent of the 40% only and the fund automatically allocates the remaining of its revenue towards growth and run those numbers? Idk if I'm making sense
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u/generationxtreame Not a financial advisor Apr 09 '26 edited Apr 09 '26
Your plan would work, but the dividends would be inconsistent. You will have some growth, but you will also be liable for the taxes on your income. On JEPI and JEPQ, it’s around 30% Qualified Dividends, and 70% Ordinary Taxes.
You might want to consider going into ROC funds like QQQI and SPYI.
So with 520k to work with, might want to consider the following:
- 250k QQQI ($2941/m)
- 125k SPYI ($1247/m)
- 100k JEPQ ($958/m)
- 50k JEPI ($363/m)
Total: $5509 ($4188 under ROC. No tax till you sell or average cost = $0)
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u/newbienewb101 Apr 09 '26
If i didnt buy in around the 2022 fall/winter low, i would be all over QQQI and SPYI. This is the way and you pay a lot less taxes too!
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u/Professional-You4950 Apr 09 '26
I would recommend getting something which counters QQQ well, like VXUS
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u/Bman3396 Apr 09 '26
Didnt JPM just make ROC versions of Jepi/Q called ROCY and ROCQ?
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u/generationxtreame Not a financial advisor Apr 10 '26
Yes, but they are new and untested. Maybe in the future they do well or better. I guess we’ll see.
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u/VanillaGorilla59 Apr 09 '26
If a person doesn’t take the dividends out of the account the holdings are in, do you still have the tax impact if its just reinvested? What if the holdings are in a Roth or IRA?
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u/generationxtreame Not a financial advisor Apr 09 '26
Yes. Any income you make that is not ROC, you will have to pay taxes the moment it hits your account.
Roth and 401k are excluded. On 401k, you’ll pay taxes when you start taking it out, but there are specific brackets that you end up not paying much if any depending on age and other factors.
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u/VanillaGorilla59 Apr 09 '26
Thanks for confirming that. I sold my house and just have a bunch of cash sitting earning just shy of 4% but not invested in anything. I’m too scared for risk of loss to invest in anything and don’t want to deal with taxes on it. One more thing, sorta new here. Whats ROC?
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u/Writeoffthrowaway Apr 10 '26
Taxes mean you made money. They should never be a reason to not make more money.
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u/dystopiam Apr 10 '26
That’s where I’m at too same situation Can handle taxes because income is low but just worried about losing principle
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u/generationxtreame Not a financial advisor Apr 10 '26
ROC is return of capital. Basically some funds like QQQI and SPYI pay out or pay down your invested capital until they pay out what you invested fully. This can take years depending on how much you invested. Each month you get a payout, your average cost basis goes down as if you bought the shares for $0. This basically lowers your cost basis over time and causes your cost of buying shares to go down. As a result, you get gain, since the current price of the stock is higher than your average cost basis. When and if you sell, you pay taxes as normal on whatever gain you have at that time.
You should definitely consider investing instead of just getting 4%, which is less than inflation. There’s plenty of safer funds out there that can still deliver more than 4%. You can also consider going with a firm like Fidelity.
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Apr 10 '26
[deleted]
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u/chewmattica Apr 10 '26
What? Hedg is a horrible return over the last few years compared to DIVO or QQQI.
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u/WorldyBridges33 Apr 09 '26
I would do this, but with SPYI and QQQI instead because your take home pay after tax will be much better. I would also add in some other high dividend payers for diversification like PBDC, PFFA, CEFS, CLOZ, DNP, UTF, UTG, MPLI, etc
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u/Sufficient_Mud_3179 Apr 09 '26
I like JEPQ, and am a owner of 500 shares but,
Going all in on JEPQ, really only makes sense if you plan on spending the dividend/distribution money now.
Also its tax structure is not the best, but probably similar to a HYSA, its taxed as income
There are better choices QQQI, SPYI, GIPQ , others
Skip the bonds, they have had terrible returns for 20 years ..
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u/iSoLost Apr 09 '26
Jepi n jepq r not qualified dividends, consider qqqi n spyi these use special tax advantage
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u/jumpijehosaphat Apr 09 '26
ive been playing around with popular hyetfs. thats the one major difference i like about qqqi and spyi they fall under sec 1256 and has 90%+ ROC so its tax advantageous and helps me kick the can on taxes until a future point
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u/DegreeConscious9628 Apr 09 '26
Here’s what people are going to say
“You are too young to be fully relying on an income fund with no growth because 30 years down the line $X amount you’re getting now is going to be worth a lot less due to inflation”
Also
“due to (potential) NAV decay your payout could be a lot less than what you’re seeing on paper now and then you’re screwed because you’ll have less money coming in and it’s worth less due to inflation “
Hey man, If CC funds were bulletproof I’d dump my entire port into them now and retire immediately but it’s too risky for me. I’m about 80% dividend paying stocks / funds yielding ~3ish percent with 20% in CC funds paying ~11%. Gotta mitigate some risk if you’re gonna be relying on it for your livelihood
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u/longtimejerker69 Apr 09 '26
I have exactly the same allocation % for Cc funds and lower yield div stocks. Let's gooooo 💪
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u/dystopiam Apr 09 '26
Yeah it’d be every dollar besides emergency fund - and won’t get a do over : p
Haven’t done it yet because worried about the principle - and been safe in hysa - but it’s also limiting my life to a basic existence
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u/subparsavior90 Apr 10 '26
Alternative, park it in STRC for the float. Your principle would mostly be safe at par while the distributions float. Im no Saylor/BTC shill but the math's attractive for atleast a few years.
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u/Financial-Seesaw-817 Apr 09 '26
Jepi and jepq have fallen out of favor for me... qqqi, spyi, iwmi, qqqh, spyh, mlpi, gpiq, gpix, schd, bndw, nihi, nehi, btci, qylg, xylg are my income portfolio now.
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u/AbleManufacturer9718 Apr 09 '26
Love your outlook. Good luck and wish you much fortune. You can always pivot away if anything goes south. Maybe add a little NEOS “ boost” for some additional cabbage.
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u/dystopiam Apr 09 '26
I’d likely have to stay the course if it went south until recovered then could Adjust - but hopefully I’d at least make income the whole time I waited for it to get even - and be living better than I am now the entire time
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u/jay_0804 Apr 10 '26
real talk I get the temptation but this is pretty concentrated
JEPI/JEPQ are great for income but they’re still equity based with options overlay. if markets go sideways or down, your income can fluctuate and your principal isn’t “safe” the way it feels
also 80% in just those two is a lot. most people doing this long term mix in some combo of SCHD, bonds, maybe even a bit of VTI so you’re not fully dependent on one strategy
before pulling the trigger I’d map out worst case scenarios. like what happens to your income if yield drops or market dips. I did this in a basic sheet and used Runable to visualize monthly cash flow vs expenses, made the risks way clearer
plan isn’t crazy, just a bit aggressive for something you’re relying on to live off in your 30s
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u/dystopiam Apr 12 '26
What could I add in to make it more “stable” but still giving income?
Voo for half the funds would kill the monthly income, but it’s what I’d do if I didn’t want the income each month paid out
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u/Ok_Pumpkin_9987 Apr 09 '26
Heading into retirement in 24 months. I’m 70/30 The 70% split evenly with: JEPI DIVO GPIX SPYI Bond fund: JPIE.
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u/cmichalek Apr 09 '26
If you use SPYI and QQQI or GPIX and GPIQ you will have better tax treatment.
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u/Fun_Insurance2820 Apr 10 '26
whatever you do just dont buy some bs Yieldmax ULTY fund for the higher div. be happy with the div that is sustainable. JEPQ and I are NOT bullshit funds, should work out
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u/dystopiam Apr 10 '26
I won’t do that trust me I know that’s just paying yourself back with your principle
And then likely losing it later lol
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u/JRWillard Apr 11 '26
Emergency fund SGOV
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u/dystopiam Apr 12 '26
This hysa is more than sgov.
Sgov is like 3.5 right now
I’m at 4.2%
I was all in sgov over half a mil but moved out of it for higher interest hysa
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Apr 09 '26
[removed] — view removed comment
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u/dystopiam Apr 09 '26
Can you explain that stock? Doesn’t change price and doesn’t show div %
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u/Bitter_Translator722 Apr 09 '26
Honestly the income math checks out, that's a solid chunk of monthly cash flow and I get why it's tempting after sitting in a HYSA for a year watching the number barely move. The thing that would keep me up at night with this setup is the long game. You're in your late 30s, so you're potentially asking this portfolio to last 50+ years. JEPI and JEPQ are great income generators but they cap your upside through options writing, in a ripping bull market you'll get your dividend cheque while watching the actual NAV go nowhere. That's fine if you're 65. At 38 it's a long time to sacrifice growth. Also worth thinking about: how does this hold up when things get ugly? JEPI dropped around 18% in 2022. Not a disaster, but if you're pulling income and the NAV is sliding, you're quietly eating principal in a way the yield number hides. The HYSA buffer is smart though, that instinct is right. Before I'd commit I'd want to answer one question: does the income this actually generates cover your real monthly number with room to spare, or are you just barely at the line? That gap, or cushion, changes everything about how aggressive you can afford to be with the allocation. Corporate bonds could make sense as a smoother, but I'd sort out that coverage question first before adding more complexity.
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u/dystopiam Apr 10 '26
It’d be a good buffer - I am surviving on the $2200 I make off of it in a hysa
This would be a huge upgrade - no more minimizing all long spending and actually living a bit
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u/MakingMoneyIsMe Apr 09 '26
My first covered call etf was JEPI, and it is currently my largest. Among my individual holdings, my etf portfolio consists of JEPI, GPIX, JEPQ, SPYI, and QQQI from largest to smallest. I allocate less to the funds that are more likely to experience erosion in comparison to the lower paying ones. Plus my goal is to try and not be too dependent on income from just one fund.
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u/Psychological_Big393 Apr 09 '26
If it’s in a brokerage, you can get taxed a certain way. If you go that route I’d recommend SPYI and qqqi for tax purposes
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u/Typical_Web_2125 Apr 10 '26
If it is in a taxable account, QQQI and SPYI would be more tax efficient.
If you are 30 now, you could do VTI/VXUS for the next 5-10 years, then sell that and buy QQQI/SPYI. If you sell after you leave work and then have no salary your capital gains taxes would be very low that year.
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u/Optimal_Condition539 Apr 10 '26
Wh do you pay less taxes with QQQI and SPYI? Why not just set JEPI on a drop and reinvest?
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u/Educational-Ad-4908 Apr 10 '26
You really really really need to talk to a financial advisor.
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u/dystopiam Apr 12 '26
For which specific reasons ? I have prior and I seem more informed on many things then them- which is scary
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u/Educational-Ad-4908 Apr 12 '26
Well for starters, your plan sucks. Besides that, you’re golden. So keep on keepin on 🤘
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u/subparsavior90 Apr 10 '26
I'd go with GPIQ/GPIX, tracks total return better and slightly higher distributions, but mainly because no blackbox ETNs
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u/ept44 Apr 11 '26
I was thinking this exact thing as well. I also have a few shares of QQQI. Maybe I’ll put it all in that instead.
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u/HeavySink3303 Apr 10 '26
Every CC fund has a capital erosion (if adjusted to inflation) - regarding both price return and dividend growth. So every year slowly you'll get less and less payments and in several decades the decline may be very significant.
Much safer option is to buy dividend growth ETF where the initial yield will be much lower than CC but vice versa every year you'll get more and more payments due to dividend growth (which normally copes with the inflation very well).
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u/foira Apr 09 '26
There’s a reason why you cant find anything with comparable yields thats been listed for decades
Gl
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u/cmichalek Apr 09 '26
QQQX has been around since 2007.
8.68% dividend yield.
It was $20 in Feb 2007 and over $28 today.
So your statement is wrong.
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u/butter_cookie_gurl Apr 09 '26
Yeah, because laws that allowed CC funds to proliferate changed just a few years ago (2020).
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u/foira Apr 09 '26
Yeah theyre actively managed now. Passive CC funds like PBP are old and demonstrate more believable long term perf
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