Managed Payout Mutual Funds

It sounds like you are mixing issues. Those funds may or may not distribute enough to meet your RMD figure in year 1, but most certainly won't a few years down the road. Do you need the funds from your RMD? If not, you can just transfer the shares from your IRA to your cash account to satisfy the RMD, you don't need to change your asset allocation in anticipation of RMDs. Sorry, those funds you referenced sound too gimmicky for my liking. Comparing to annuities is apples to oranges, completely different investment.

Joe

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The only comparison Joe, is monthly income. I have dealt with Vanguard for a long time and feel very comfortable with their expertise, and no I really don't need the distribution. It so happens however that on one of the options, which provides 5% of the principal (payable monthly) is sufficient to meet my RMD. In years that it is not, I can take the balance at the end of the year. In either case, I would have it disbursed to their Money Market account. Unlike annuities, there is access to your account balance as well as the potential for growth. I am not anti annuity. I think annuities are perfect for some situations, but this new concept has appeal to some, in my view.

Lon

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If you really don't want the income from the IRA, convert it to a Roth IRA which has no mandatory distribution requirements. You may want to do the conversion in parts to avoid a high tax burden. Your AGI would have to be under $100,000 for a couple to do the Roth conversion. In

-- Ron

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As a historical note, I believe this was the original concept of "hedge fund" - a payout higher than long term government bonds by investing both long and short. In recent years hedge has taken on the nefarious meaning of any sort of cowboy investing one can get away with as long as one have few enough investors to hide from the SEC. And most of those dont do true hedging anymore.

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