The final months of 2026 are putting options-income ETFs under a brighter spotlight. These funds can turn stock exposure into monthly cash by using options, which makes them interesting for retirees and other investors who want income without abandoning equities altogether. But the headline payout only tells part of the story. The four funds here currently have 12-month trailing distribution rates ranging from roughly 5.9% to 11.9%, and they take very different approaches to producing that cash.
That distinction matters even more when investors can earn meaningful income elsewhere without taking stock-market risk. The 10-year Treasury yield stood at 4.68% on August 12, 2026. An options-income ETF may distribute substantially more, but that extra cash comes with equity risk, management fees, potentially capped upside, and distributions that can change from month to month. For retirees using portfolio income to cover living expenses, I would pay as much attention to total return and NAV as I would to the size of the monthly check.
SPYI: The Biggest Distribution Comes With Important Tax Details
SPYI is still the highest-distribution option of this group, with a 12-month trailing distribution rate of 11.94% as of July 31. The fund owns S&P 500 exposure and uses SPX index options to generate monthly cash flow. NEOS also highlights a tax wrinkle that can matter in a taxable account: those SPX options are Section 1256 contracts, whose gains and losses generally receive 60% long-term and 40% short-term capital-gain treatment. But retirees should not read the distribution rate as a bond-like yield. NEOS says the fund’s distributions can include option premiums, dividends, capital gains, interest, and return of capital, with final tax treatment reported later. A return of capital can reduce your cost basis, which may increase taxable gain when shares are eventually sold.
GPIX: Less Income, but More Room for the Market to Run
GPIX takes a more restrained approach. Its 12-month trailing distribution rate was 8.11% as of July 31, while its net expense ratio is 0.29%. Goldman Sachs keeps the portfolio close to the S&P 500 and dynamically writes calls on roughly 25% to 75% of the equity portfolio under normal conditions. That flexibility is the attraction. Selling fewer calls can leave more room to participate when stocks climb, while selling more can bring in additional premium when the manager believes the tradeoff makes sense. For a retiree who wants monthly cash flow but still needs long-term growth to help offset inflation, that balance can be more useful than simply chasing the biggest distribution. The catch is familiar: call writing can still limit gains in a strong rally, so the monthly payout should be judged alongside total return and changes in NAV.
IQQQ: Tech-Heavy Income With a Different Kind of Options Strategy
IQQQ is the tech-heavy choice, but one important detail in the original description needs fixing. The fund does not directly write daily call options. ProShares says IQQQ uses equity securities and derivatives, including swaps, to replicate the Nasdaq-100 Daily Covered Call Index, whose strategy sells one-day call options. Its official 12-month distribution rate was 5.88% as of July 31, and the expense ratio is 0.55%. The Nasdaq-100 exposure means investors are taking on more concentration in large technology and growth companies than they would with an S&P 500 fund. That can be attractive when growth stocks are leading, but it also gives retirees another source of volatility. ProShares also warns that monthly distributions can vary and that amounts paid to meet the strategy’s minimum distribution target can include economic return of capital.
BALI: Lower Income, but a More Flexible Large-Cap Approach
BALI is not an 8% to 13% fund based on its current official numbers. BlackRock reported a 6.50% distribution rate as of August 12 and a 7.82% 12-month trailing distribution rate as of July 31. The fund charges 0.35% and had about $1.38 billion in net assets on August 12, far above the $91 million figure in the original draft. Its strategy combines an actively selected portfolio of U.S. large-cap stocks with call options on a broad U.S. large-cap index and index futures. That makes BALI less of a pure income maximizer and more of a stock portfolio with an income overlay. For retirees, that distinction matters. A lower headline distribution may be perfectly acceptable if the fund preserves more participation in rising markets, but the right comparison is total return, volatility, taxes, and how much of the payout is actually supporting spending needs.