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Managed Payout Funds
Old 07-18-2008, 08:32 AM   #1
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Managed Payout Funds

Looking for opinions (we all have at least one) on splitting up a retirement portfolio into the Vanguard managed payout funds. Say 33% into each category of growth vs payout.
So, with a 1mm ira, put $330k +/- into each fund.

What's the downside? What am I missing?

b
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Old 07-18-2008, 08:38 AM   #2
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I'd say the greatest downside is that these funds are unproven and untested.
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Old 07-18-2008, 08:38 AM   #3
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There's no guarantee that the payouts or investment objective of these funds will be met. Poor investment performance will result in the payouts being reduced. Higher returns will result in additional income being available. They are not annuities theoretically guaranteed by an insurance company.

Please, let's not start another annuity thread.

I would recommend a diversified portfolio similar to a version of whatever Couch Potato portfolio you are comfortable with. You're a new member to the forum (welcome!) so if you aren't familiar with these please google Scott Burns and read some of his articles of Couch Potato investing.
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Old 07-18-2008, 09:36 AM   #4
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Quote:
Originally Posted by bentley View Post
Looking for opinions (we all have at least one) on splitting up a retirement portfolio into the Vanguard managed payout funds. Say 33% into each category of growth vs payout.
So, with a 1mm ira, put $330k +/- into each fund.

What's the downside? What am I missing?

b
There's not much downside, but if you read this thread Bogleheads :: View topic - Managed Payout -- Here's What's Inside!! (5/31/08) about the composition of the funds, you'll see that you could select the mid-payout fund and have about the same thing. (look down the thread to the 6/30 update posting )
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Old 07-18-2008, 12:46 PM   #5
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I'd also point out that you are making it uneccessarily complicated by buying all 3, just choose the 1 that meets your risk tolerance.

DD
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