Retirement income funds – A one-stop payout solution

Retirement income funds are the best solution for a stable monthly income after retirement. They are managed actively to pay retirement income regularly. They provide with great investment management schemes and solutions and are more flexible than annuities. The top four retirement income fund companies in the USA are Vanguard, Fidelity, Schwab, and John Hancock. But you should keep in mind that this kind of funds do not provide any guarantee, so you must be mentally prepared to expect a fluctuation of your asset prices and investment income. Details on the 4 retirement income funds are provided below.

  • Vanguard Payout Funds

The company’s annual distribution rate is 4%. The investment is done mainly on the basis of a concept called ‘’funds of funds’’, in which your money is initially allocated across several other stocks of Vanguard and the bond funds and the allocation of the funds are changed by the fund manager. This strategy can accomplish the objective only when you are ready to invest for a long time. The minimum investment for this fund is $25, 000 and the expense ratio is .38%

  • Fidelity

The Income Replacement Funds of Fidelity are basically designed to provide a monthly income by paying the earnings over a certain period of time and the principal, almost similar to an annuity. Most important feature of this fund is that the monthly income amount is intended to maintain pace with the inflation. The minimum investment for this fund is $25, 000 and the expense ratio ranges from .50% to .70%.

  • Schwab

There are three funds in the Monthly Income Fund series of Schwab. Each of these types of funds is equipped with a targeted amount as a payout which ranges from 1-8%. The names of the funds are ‘’Moderate Payout”, “Maximum Payout” and “Enhanced Payout”. The minimum investment for this fund should be $100 and the expense ratio is between .47% and .66%.

  • John Hancock

John Hancock provides with a series of Retirement Living Funds. The funds maintain a goal to maximize the returns till the targeted retirement year and then the target shifts to achieving the goal of generating an increase in the current income.

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