TSPY: 13% Yield That Could Fund Your Retirement

If you’re building an income-first portfolio for retirement—and you still want meaningful equity exposure—there aren’t many products that try to do both every single trading day. The TappAlpha SPY Growth & Daily Income ETF (TSPY) is one of the rare funds attempting that balancing act: it owns the S&P 500 via SPY exposure and writes daily out-of-the-money, zero-days-to-expiration (0DTE) covered calls to harvest option premiums for cash flow. The result: a double-digit, ~13% trailing yield with built-in participation in large-cap U.S. equities. tappalphafunds.com+2dividend.com+2

Below is a practical deep-dive on what TSPY does, where that income actually comes from, the trade-offs you’re making to earn it, how it stacks up against popular income peers, and how a retiree could sensibly implement it.

The elevator pitch

What it is: An actively managed ETF that seeks income and growth by holding SPY exposure and selling daily 0DTE covered calls to generate option premiums. tappalphafunds.com+1
Why it exists: To turn intraday volatility in the S&P 500 into a recurring income stream while still letting investors participate in a chunk of the market’s upside (albeit capped). tappalphafunds.com
Why it’s interesting now: The fund is producing ~13% trailing 12-month yield, paid monthly, a level that could materially move the needle for retirement cash flow, especially when combined with Social Security or pensions. StockAnalysis
Scale and momentum: Launched August 14, 2024, TSPY recently crossed $100M+ in AUM and, per an October 31, 2025 release, reached ~$120M—useful context for liquidity and staying power. StockAnalysis+2Barchart.com+2

How TSPY generates that ~13% yield

1) The daily covered-call engine

Most covered-call funds sell options weekly or monthly. TSPY is different: it writes out-of-the-money calls with zero days to expiration every trading day, constantly resetting the option overlay. Mechanically, this tries to capture the rich intraday time-decay and volatility premium that’s been pronounced in recent years, as 0DTE options have exploded in volume. By harvesting a little premium day after day and pooling it, TSPY seeks to fund monthly distributions. dividend.com+1

2) Where the income shows up

Distributions are paid monthly (the fund’s recent ex-div was October 7, 2025), and the trailing payout equates to roughly 13% yield on recent prices. Yields fluctuate—premiums depend on volatility and path—but the key is that this is recurring cash flow, not a one-off special. StockAnalysis

3) What you give up

Covered calls cap upside. If the S&P 500 rips higher in a straight line, the options you sell will get called away (or you’ll offset them), which trades some upside for cash today. In chop, sideways, or gentle uptrends, daily call writing can shine; in a roaring bull market, it will likely lag plain SPY.

Is ~13% “safe”? A framework for thinking about sustainability

No yield is guaranteed—and any double-digit payout deserves scrutiny. Here’s a framework that balances opportunity and risk:

Volatility dependence:
Option premiums are richer when realized or implied volatility is elevated. If markets get extremely calm, premiums shrink and payouts could trend lower. Conversely, moderate volatility can be a tailwind for sustaining higher cash flow. (This is true for all option-income funds, not just TSPY.)
Behavior across regimes:
- Choppy/sideways markets: Potentially ideal. You harvest premium while the index mills around.
- Grinding uptrends: Generally good, but you’ll trade some upside for income.
- Sharp selloffs: Premium helps partially cushion downside, but you still have equity beta exposure. Premiums can rise after selloffs, which may support higher future distributions—yet NAV damage still matters.
Total return vs. headline yield:
The right metric is total return (price + distributions) over full market cycles. Early evidence is encouraging but limited by a short track record: since launch (Aug 2024), third-party total-return trackers show TSPY roughly keeping pace with (and sometimes edging) comparable income peers—again with the caveat of a short sample. Always treat young funds conservatively until they prove durability across regimes. Total Real Returns
Payout composition and taxes:
Option-premium income distributed by equity income ETFs often lands as ordinary income (not qualified dividends), though fund-level accounting can vary by period and may include return of capital in some months. Expect less favorable tax treatment than qualified dividends from blue-chip stocks; confirm your 1099 each year. (This is general option-fund reality; check TSPY’s tax docs each season.) tappalphafunds.com
Costs and scale:
You pay an active-management fee for daily execution. TSPY’s growing AUM (>$100M; ~ $120M as of 10/31/25 mention) is reassuring for spreads/liquidity, and for the issuer’s commitment to the strategy. Barchart.com+1

TSPY vs. other S&P 500 income ETFs (quick context)

The most frequent comparison is NEOS SPYI, a popular S&P 500 high-income ETF that writes options and emphasizes tax efficiency. SPYI typically writes monthly index options and pairs that with options on S&P 500-related exposures; TSPY’s differentiator is the daily 0DTE call overlay. In short:

TSPY: Daily, out-of-the-money 0DTE calls; seeks to capture intraday premium systematically; paid monthly; newer track record. dividend.com
SPYI: Actively managed options program emphasizing tax efficiency with a more traditional cadence; also monthly distributions; longer history. NEOS Investments

Performance since TSPY’s launch has been broadly competitive with SPYI on third-party trackers, but again, this is a short window and past performance is not predictive. Use this comparison primarily to understand mechanical differences rather than to crown a winner. Total Real Returns+1

The retirement math: can ~13% “fund” your lifestyle?

Let’s make the numbers tangible. Suppose you’re aiming to cover $4,000/month ($48,000/year) from portfolio income:

At a 13% yield, you would need roughly $369,000 in TSPY (48,000 ÷ 0.13 ≈ 369k) to target that gross cash flow—before taxes and before any reinvestment.
For $65,000/year of pre-tax distributions (a common target to supplement Social Security), you’d need about $500,000 allocated.

Two important caveats:

Yields float. Options income breathes with volatility and price. Expect your monthly check to vary.
Sequence risk matters. In a big equity drawdown, your account value falls even as income may temporarily rise (higher vol = higher premium). That can feel odd—and it’s why many retirees blend income products with lower-volatility ballast.

A practical way to deploy TSPY for retirement is to pair it with cash-like reserves and/or short-duration Treasuries. That lets you set a 12–24 month “paycheck buffer” in safer assets while letting TSPY handle a core slice of income production.

How TSPY might fit in a real portfolio

Example target: A retiree wants 4–5% overall portfolio withdrawals with reduced sequence risk.

Core equities (35–45%): Broad market ETFs or dividend growth stocks.
Income sleeve (25–35%): Mix TSPY (S&P 500 income), a complementary income ETF (e.g., SPYI or a NASDAQ-tilted income fund), and a sprinkle of covered-call strategies on sectors you understand. The idea is to diversify option overlays—daily vs. monthly, index vs. ETF, etc.—so you’re not relying on one premium stream. NEOS Investments
Quality bonds/short duration (20–30%): Treasuries, investment-grade, and/or laddered T-bills—your buffer for 12–24 months of spending.
Cash (5–10%): Monthly-expense runway, reloaded by distributions.

This setup aims to smooth cash flow: TSPY and peers do the heavy lifting for income; bonds and cash damp the ride so you don’t sell equities at the worst time.

What could go wrong? (Know the risks before you hit “buy”)

Big, fast upside can make you underperform.
In a melt-up, covered calls drag. The market can sprint beyond the strikes you sold. That’s not a “bug,” it’s the design: you monetize upside path into cash today.
Volatility could compress.
If intraday vol dries up, the daily premium available shrinks, and distributions may fall below that ~13% trailing figure. (Flip side: vol spikes often let funds raise payouts later.)
Short track record.
TSPY launched in August 2024. That’s not long enough to judge a multi-cycle strategy with confidence. Early AUM growth (to $100M+ / ~$120M) inspires some confidence in staying power, but investors should size positions prudently while the track record builds. StockAnalysis+2Barchart.com+2
Tax treatment may be less friendly than qualified dividends.
Expect a meaningful portion of distributions taxed as ordinary income; return-of-capital can appear in some months (check year-end statements). This matters for taxable accounts. (Retirement accounts are naturally simpler.) tappalphafunds.com
Fund-specific execution risk.
Daily 0DTE is operationally intensive. You’re paying management to get those micro-decisions right, every day. Compare the fee to peers and decide if the engine’s edge is worth it. tappalphafunds.com

Why I think TSPY is a buy today

1) Purpose-built for income without abandoning equities.
Many retirees crave cash now but don’t want to exit the stock market’s growth engine. TSPY’s structure is designed precisely for that middle ground: the S&P 500 remains the core driver, while the daily call overlay turns volatility into a monthly “paycheck.” tappalphafunds.com

2) The daily cadence is an innovation that matches the market we actually have.
Like it or not, 0DTE options have reshaped intraday dynamics. A strategy that systematically engages that market every day makes sense if you believe intraday vol will persist as a feature, not a bug, of modern markets. dividend.com

3) The cash flow is meaningful at real-world sizes.
A $300–500k allocation can plausibly cover a significant fraction of a median retirement budget at current yields, especially combined with Social Security. Even if yields normalize lower in calmer markets, the baseline distribution is still likely to be well above dividend yields on broad market funds. StockAnalysis

4) Early scale and peer-level results, with clear trade-offs.
Crossing nine figures in AUM within ~14 months is a positive sign, and early total-return comparisons look competitive—again, with full humility about the track record length and regime dependence. Barchart.com+2GlobeNewswire+2

Implementation guide (in plain English)

Position sizing: Consider 5–15% of a diversified portfolio as a core income sleeve starting point. Increase only after you’ve watched a few distribution cycles and seen behavior in different markets.
Where to hold it: Tax-advantaged accounts (IRAs, Roth IRAs) are ideal because of ordinary-income character. In taxable accounts, plan ahead for the tax bill. tappalphafunds.com
Reinvestment policy: If you don’t need every dollar, reinvest part of the distribution to counteract any capped-upside drag over time, or redirect to your bond/cash buffer.
Pairing: Combine TSPY with a complementary income ETF (different cadence, index, or overlay) and with short-duration Treasuries for a year of expenses. Diversify your sources of cash flow. NEOS Investments
Expect variability: Month-to-month payouts will fluctuate. Design your household budget using a conservative run-rate; treat upside as a bonus.

A quick peer check: what makes TSPY different?

Feature	TSPY	SPYI (context)
Underlying exposure	S&P 500 (via SPY)	S&P 500–related
Options cadence	Daily 0DTE covered calls	Typically monthly/active, tax-efficient overlay
Distribution	Monthly, ~13% trailing	Monthly, usually high single- to low-double-digit depending on regime
Track record	Since Aug 2024	Since Aug 2022
AUM	$100M+ / ~$120M mentions (Oct 2025)	Larger, established

The takeaway isn’t that one is “better,” but that TSPY’s daily engine is the distinguishing feature. If you want an income strategy explicitly engineered for the 0DTE era, TSPY is the cleanest expression of that thesis. GlobeNewswire+4dividend.com+4NEOS Investments+4

What I’ll watch going forward

Distribution stability through low-volatility stretches.
If realized intraday volatility compresses for quarters at a time, does the yield hold up reasonably? tappalphafunds.com
Behavior in a sharp, prolonged drawdown.
We’ve seen garden-variety pullbacks since launch; a true bear market will test how much premium offsets equity beta. Total Real Returns
AUM/liquidity progression.
Continued growth beyond $120M should help spreads and resilience; stagnation wouldn’t be a deal-breaker, but growth is a plus. GlobeNewswire
Peer dispersion.
Daily vs. monthly overlays can lead to performance gaps in certain regimes. Keeping an eye on SPYI and others helps set expectations. PortfoliosLab

Bottom line

TSPY isn’t magic—and it isn’t supposed to be. It’s a workhorse income tool for retirees and near-retirees who want substantial, recurring cash flow without abandoning the S&P 500’s growth engine. You trade a slice of upside for monthly income that’s meaningfully higher than standard equity dividends, delivered by a strategy aligned with today’s intraday options landscape.

With a ~13% trailing yield, credible early scale (>$100M / ~ $120M AUM), and a design that’s uniquely tuned to harvest daily premium, TSPY earns a “Buy” for income-centric investors who understand the trade-offs: capped upside, equity-beta risk, and less-friendly taxable distributions. Sized prudently and paired with a sensible cash/bond buffer, it can be a centerpiece of a retirement income sleeve—one that’s built to cut monthly checks while keeping you in the game. StockAnalysis+2Barchart.com+2

Notes and sources: Fund strategy and design from the issuer’s site and materials; daily 0DTE covered-call description and comparison docs; launch date, yield and distribution cadence from independent ETF data aggregators; AUM milestones from October 2025 press releases; third-party total-return trackers for early performance context. Always verify current holdings, fees, and tax character in the latest prospectus and fact sheet. Total Real Returns+7tappalphafunds.com+7tappalphafunds.com+7

Standard reminder: This article is for educational purposes and not individualized financial, tax, or investment advice. Consider your own risk tolerance, tax situation, and investment horizon before allocating.