Buffered ETF Mechanics: EDU #2613

The Retirement and IRA Show

Jim Saulnier, CFP® & Chris Stein, CFP®

Business, Investing

4.3 • 729 Ratings

🗓️ 1 April 2026

⏱️ 85 minutes

🔗️ Recording | iTunes | RSS

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Summary

If you would like to skip over the guys’ banter this week about Jim’s experience going to a Cincinnati Reds game, you can go to (7:00).

Chris’s Summary
Jim and I are joined by Jacob as we revisit buffered ETF mechanics in light of recent market volatility and explain why 100% and 20% buffers can still show interim losses. We also cover how renewals work, why resets are not taxable events in brokerage accounts, where these products may fit in retirement positioning, and a listener email comparing them with bonds and fixed indexed annuities.

Jim’s “Pithy” Summary
Chris and I are joined by Jacob as we go back into buffered ETF mechanics during a stretch where people are actually seeing movement in these products and questioning what they own. When markets pull back, even modestly, the expectation is that protection means no decline at all. Jacob walks through why that is not how these function in real time, and why a 100% buffered ETF can still show a small loss while a 20% buffered ETF can show more, even when the market decline remains within the stated buffer range. The distinction comes down to how these are priced day to day versus how the protection applies over the defined outcome period.

We also clarify how renewals work, what happens when values reset higher or lower, and how that process functions within a brokerage account. The discussion also covers how these may fit within portfolio positioning depending on how the dollars are being used. Jacob outlines how full principal protection may be used for nearer-term spending needs, including the Minimum Dignity Floor, while partial buffers may apply to longer time horizons where some level of downside can be accepted in exchange for additional upside potential. A listener email introduces the idea of using these as ballast, along with a comparison to bonds and fixed indexed annuities, including differences in liquidity, tax treatment, fee transparency, and how returns are delivered.

The post Buffered ETF Mechanics: EDU #2613 appeared first on The Retirement and IRA Show.

Transcript

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1:18.6	That's Jim H-E-L-P-S dot com and click the Meet the Team button on the homepage. Now here's Jim and Chris
1:26.3	with today's show.
1:35.8	Hello everybody and welcome to the Retirement and IRA show, EDU edition for this week.
1:41.0	I'm going to go off a little different direction this week on the EDU show. We're going to revisit buffered ETFs. The reason why we're going to do buffered ETFs.
1:45.4	The reason why we're going to do that is twofold, really.
1:49.5	We've gotten several questions about them.
1:51.9	We've talked about them on previous shows.
1:55.6	We've had a special guest on the show while back from Calamos, who Matt Kaufman is his name, who
2:05.4	talked about their particular buffered ETF product. And so we've kind of shared as from an
2:14.2	educational standpoint with people, what these things are, how you might think about using them, that type of thing.
2:21.0	So we've got, we've had some questions come in.
2:23.2	But secondly, a lot of people were always wondering, how do these things actually perform when there is a downturn in the market?
2:31.5	And it can be a little confusing about how they actually work. So
	...

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