Essential for Retirees

Don't Let a Yield Trap Destroy 30 Years of Savings

You worked decades to build your nest egg. One misleading ETF — paying you back your own money while you watch the NAV decline — can undo years of compounding. This guide teaches you exactly how to tell the difference.

The Risks Retirement Income Investors Face

Return of Capital Disguised as Income

Many high-yield ETFs are simply returning your own principal. The yield looks real. The portfolio balance tells the true story.

NAV Erosion You Won't Notice for Months

Erosion happens slowly. By the time it's obvious, a $100K position can be worth $70K — while still paying distributions.

Sequence-of-Returns Risk at the Worst Time

In retirement, a major drawdown in year 2 is catastrophically different from one in year 20. Yield traps strike at the worst possible moment.

What's Inside

Chapters marked Most Relevant are specifically applicable to your situation.

1
The 5-Tier Risk Spectrum

A systematic framework for classifying any income ETF from Cornerstone (Tier 1) to High Octane (Tier 5).

2
Anatomy of a Yield TrapMost Relevant

The 6 structural signals that separate sustainable income from return-of-capital illusions.

3
NAV Erosion: The Math

How distributions exceeding earnings gradually destroy principal — with real ETF case studies.

4
Coverage Ratios Explained

How to read a fund's distribution coverage ratio and what thresholds signal danger.

5
10 Case Studies

Real ETFs analyzed: which ones are yield traps, which are sustainable, and why.

6
The 30-Second Audit ChecklistMost Relevant

A printable checklist to evaluate any dividend ETF in under 30 seconds.

7
The 5-Step ETF Audit

A deep-dive due diligence process for any ETF you're considering adding to your portfolio.

8
Portfolio ConstructionMost Relevant

How to combine tiers for your specific income goal — conservative to aggressive allocation models.

18 of 50

High-yield ETFs analyzed showed meaningful NAV erosion over 24 months — many while continuing to advertise their "high yields."

Is This Guide Right for You?

This guide is for you if...

  • You rely on dividend income to cover living expenses in retirement
  • You hold or are considering any ETF with a yield above 8%
  • You want a systematic framework, not guesswork, for evaluating income ETFs
  • You've seen a holding's NAV decline but weren't sure if it was a problem
  • You want to protect principal first and optimize income second

This guide is NOT for you if...

  • You only hold Tier 1-2 ETFs like SCHD, VIG, or JEPI and have no interest in higher-yield funds
  • You're in the accumulation phase and won't need income for 10+ years
  • You already have a rigorous due diligence process you're confident in
  • You want get-rich-quick strategies or guaranteed income promises

Protect Your Retirement Portfolio from Yield Traps

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