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Is anyone else rethinking the Managed Payout funds?
Old 07-20-2008, 09:25 AM   #1
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Is anyone else rethinking the Managed Payout funds?

Hi. I bought into one of Vanguard's Managed Payout funds. They have 3%, 5% and 7% funds.

I finally got a statement for this fund, and it finally showed up in the overview of stocks/bonds/other at the Vanguard website. I paid attention to the return of capital on the statement.

I'm thinking of getting out of it. I got into it thinking they are the pros at managing money, but I want to get out because I would rather choose the return of capital. When I do the choosing, I can decide better if it's worth it, if I want to do it now, and what plans I can make for waiting or making other choices.

Just what I'm thinking right now.

Anyone else?

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Old 07-20-2008, 09:33 AM   #2
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If you do a search of "Managed payout funds" on this forum you'll find various threads discussing them, including the new Vanguard ones.
Retired in Jan, 2010 at 55, moved to England in May 2016
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Old 07-20-2008, 10:19 AM   #3
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Definitely not a good fund choice for someone who wants to make choices about how and when they get paid from their investments. In fact, its pretty much set up for people who want to do exactly the opposite.

I would imagine there is a little excess return of capital right now because the investments may not be producing enough dividends and gains to pay the regular payments...buying equities and then liquidating them 28 days later to pay the bills wouldnt make much sense.

The funds arent fully invested yet, they arent invested in all of the asset classes they've laid claim to, and one of the funds/asset classes they may invest in doesnt exist yet.

So as before, I wouldnt jump into these without knowing what they are and what they're for. What they are is highly diversified, not US centric, make regular payments, and should be good long term investments for people who are retired and want the income without a lot of hands on rebalancing, selling and fiddling about.
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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