I'm looking at getting set up for the transition from a paycheck to living off of investment income. I came across Vanguards managed payout funds, and they seem to be a great tool for me to use for disbursements from savings to the "house account". I did a search on the sight to see what has been discussed previously, but the threads I found were all a bit aged, especially given the market of the last 2 years.
Is anybody using these funds? $2.3 million in the middle fund is projected by Vanguard to give me $10k/year, rising with inflation. It seems like Vanguard just changed the calculation; a couple days ago I did it and it only took $2 million to get the needed $10k. Even using the current numbers, it seems that Vanguard is projecting a real return of a little over 5%.
I don't like annuities for various reasons, but these funds seem to offer similar advantages (although without a guarantee). Am I lulling myself into accepting a too-high withdrawl rate because it is packaged by Vanguard? Are there other risks with this approach?
Thanks in advance for any insight.
Is anybody using these funds? $2.3 million in the middle fund is projected by Vanguard to give me $10k/year, rising with inflation. It seems like Vanguard just changed the calculation; a couple days ago I did it and it only took $2 million to get the needed $10k. Even using the current numbers, it seems that Vanguard is projecting a real return of a little over 5%.
I don't like annuities for various reasons, but these funds seem to offer similar advantages (although without a guarantee). Am I lulling myself into accepting a too-high withdrawl rate because it is packaged by Vanguard? Are there other risks with this approach?
Thanks in advance for any insight.