Changes to Vanguards Managed Payout Fund

[LXEX55]

https://finance.yahoo.com/news/vanguard-announces-changes-managed-payout-143000896.html

 

[copyright1997reloaded]

https://finance.yahoo.com/news/vanguard-announces-changes-managed-payout-143000896.html

So no more monthly payouts. I thought the purpose of this thing was to act as a pension replacement. (That is, emulate a monthly stream of income.)

So given the change, what is the purpose and why would one choose it?

 

[audreyh1]

Well I guess that fell flat on its face!

 

[razztazz]

Is there a difference between a monthly payout and an annual distribution? People afraid they're gonna spend it all at once?

 

[jazz4cash]

Is there a difference between a monthly payout and an annual distribution? People afraid they're gonna spend it all at once?

I’m not sure what you mean but it says the AUM was modest and most investors reinvested the monthly payout rather than taking the distribution. It also said they started with three funds with different objectives which were merged into one. Sounds to me like it just wasn’t too popular. You can always request monthly distributions I guess.

 

[Sunset]

Is there a difference between a monthly payout and an annual distribution? People afraid they're gonna spend it all at once?

I know people like that, they would be penniless for the last 2 or more months...

If it's just annual, then any regular dividend paying investment is as good or better (many pay every 3 months), and just sell some if the dividend is not enough.

<edit> After reading the article, I can see this is definitely something I would not invest in, as the cost is too high for the fee considering one can simply allocate various percentage of their money to the various funds to achieve the same/similar results and save about .25% fee.
Sure that is a small savings but on 1 million dollars, it would pay for our groceries for a year easily.