Narrator: You've worked hard to save for your retirement. Now it's time to put your portfolio to work for you. If you're looking for an easy way to generate monthly income in retirement, consider Vanguard Managed Payout Funds.

If you're like many retirees, you're probably wondering how to manage your income now that you've stopped receiving a paycheck.

You could set up an automatic withdrawal plan on your account, but you'd have to calculate how much to withdraw initially, and then recalculate a new amount each year.

And you'd have to manage your account to make sure you won't risk outliving your money.

Vanguard Managed Payout Funds can help. These funds automatically generate monthly payouts so you don't have to do any withdrawal calculations.

Based on the funds' performance, we'll adjust your payouts each year to help protect your capital. If the funds' returns are positive, the payouts will come, in whole or in part, from that income.

Of course, positive returns can't be guaranteed. So your payments may include return of your original principal in low-return market environments.

The funds are also designed to produce income without exhausting your capital. How would that work? The funds' structure is based on tested strategies used by endowments and foundations to help preserve and, in some cases, grow capital. Each fund invests in a mix of traditional investments, such as stock, bond, and international mutual funds, and nontraditional investments, such as commodities and market neutral mutual funds. This asset allocation also helps dampen the effect of market volatility on the funds' performance.

Vanguard offers three Managed Payout Funds.

Which fund you should choose depends on your investment goals, since the funds differ in their objectives. Each Managed Payout Fund seeks to provide steady monthly payouts and some level of capital growth or preservation. The lower a fund's initial monthly payout, the higher the potential for capital growth, and vice versa.

For example, the Managed Payout Growth and Distribution Fund targets a moderate payout, while also seeking to maintain a balance of payout level and potential future capital growth.

A hypothetical investor who invested $100,000 in the Managed Payout Growth and Distribution Fund this year could expect to receive about $500 each month. This amount is based upon the payout amount per share and the number of shares you own. The $500 payout amount is designed to remain constant throughout the current calendar year, but will change the next calendar year based on the fund's performance.

Next year, Vanguard will recalculate the fund's payout based on the fund's average share price.

If the fund performed well, and its share value increased by 5%, the payout per share could go up, meaning our hypothetical investor's monthly payout could go up to about $525 next year. This payout would be comprised of the fund's income, preserving the investor's original capital.

If, however, the fund performed poorly, and its share value decreased 5%, the payout per share could drop, meaning the example payout could decrease to about $475 each month next year. In this case, the investor's payments may include a return of his or her original investment principal.

If you have different retirement income needs, Vanguard offers two other Managed Payout Funds.

If you're looking for more growth potential, consider the Managed Payout Growth Focus Fund. The fund has a lower initial monthly payout, but also seeks to grow that payout and your principal over time.

If you're looking for a greater initial payout, consider the Managed Payout Distribution Focus Fund. While the fund has the highest initial payout, it does not seek to grow that payout amount or your principal over time.

For more help determining which Managed Payout Fund may be best for you, use our online tool.

One last important aspect of the Managed Payout Funds is that these investments are mutual funds.

That means you control your assets. You can buy or sell your shares any time and easily leave the funds to your heirs.

And, even though these funds are built to make monthly payouts, you can also choose to reinvest your payouts to purchase more shares of the fund.

To learn more about Vanguard Managed Payout Funds, use our calculator to see what your initial monthly payout would be or how much you'd have to invest initially to get a certain monthly payout for the current calendar year.

You can also request a prospectus or open an account online. If you'd rather speak to a Vanguard associate about these funds, call us at 888-387-5534.

The hypothetical illustrations in this presentation do not represent the return on any particular investment.

All investments are subject to risk. These funds are not guaranteed to provide their intended results.

The Managed Payout Funds calculator is provided to you free of charge by Vanguard Advisers, Inc.

For more information about Vanguard funds, visit, or call 800-662-2739, to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.


Decide which Managed Payout Fund may be best for you

Vanguard Managed Payout Funds provide various levels of payouts and growth potential. You can use this tool to help you determine which fund may best suit your needs.

To use this tool, you must consent to the electronic delivery of the Vanguard Advisers, Inc., brochure and accept the terms and conditions of use below.

Terms and conditions of use

This tool is designed to help you decide which Vanguard Managed Payout Fund may be appropriate for your investment goals. You are under no obligation to accept the suggestions provided by this tool.

The suggestions provided are based on generally accepted investment principles. There is no guarantee, however, that any particular fund or group of funds will meet your investment objectives. All investments involve risks, and fluctuations in the financial markets and other factors may cause declines in the value of your account. You should carefully consider all of your options before investing.

This tool is provided to you free of charge by Vanguard Advisers, Inc. It does not provide comprehensive investment or financial advice. In applying the suggestions to your particular situation, you should consider your other assets and investments. As your financial circumstances or goals change, you may want to use the tool again to see which funds may be most appropriate for your situation. Vanguard Advisers, Inc., is not responsible for reviewing your financial situation or updating the suggestions contained herein.

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By using this investment-planning tool, you acknowledge that you have read and understood the information above and that you agree to:

  1. Electronic delivery of our brochure.
  2. The Vanguard Advisers, Inc., terms and conditions.


Although the initial payout amount on Vanguard Distribution Focus Fund is usually higher, the fund does not seek to grow your investment's principal.

Do you wish to continue?


A fund that manages income

Vanguard Managed Payout Fund* is an innovative, single-fund approach to retirement income that pays regular monthly distributions over time while letting you maintain control of your assets.

How payment amounts are determined

Every January, the fund sets its payment amounts based on previous fund performance. It then automatically distributes regular monthly payments that are expected to remain constant throughout the year.

In the years that follow, payment amounts could be higher or lower as fund performance changes.

Learn more about Vanguard Managed Payout Fund

Review a hypothetical case study

What the fund invests in

The fund offers a complete portfolio in a single fund. It accomplishes this by investing in a number of other Vanguard mutual funds that cover a broad spectrum of the stock, bond, and international markets.

It also invests in alternative strategies like commodity-linked and market-neutral investments, such as Vanguard Market Neutral Fund.

Could this fund be right for you?

You can look at it one of two ways:

  • You know how much you plan to invest—what would your monthly payout amount be?
  • You know how much income you'd like to receive—how much money would you need to invest?

Get answers using our online calculator


Other fund benefits

Low costs
We keep the fund's expense ratio as low as possible so you get to keep more of what it earns.

See how investment costs affect retirement spending

Should something happen to you, whatever money remains in your account can be easily transferred to your spouse or heirs.

It's important to note
The fund isn't guaranteed to meet its investment objectives and is subject to loss. In addition, a portion of each payment may represent a return of your original investment (known as a "return of capital").

Read other important information about the fund

*Vanguard Managed Payout Fund is protected by U.S. Patent Nos. 8,180,695 and 8,185,464.

All investing is subject to risk, including the possible loss of the money you invest.

The Managed Payout Fund is not guaranteed to achieve its investment objectives, is subject to loss, and some of its distributions may be treated in part as a return of capital. The dollar amount of the fund's monthly cash distributions could go up or down substantially from one year to the next and over time. It is also possible for the fund to suffer substantial investment losses and simultaneously experience additional asset reductions as a result of its distributions to shareholders under its managed-distribution policy. An investment in the fund could lose money over short, intermediate, or even long periods of time because the fund allocates its assets worldwide across different asset classes and investments with specific risk and return characteristics. Diversification does not necessarily ensure a profit or protect against a loss in a declining market. The fund is proportionately subject to the risks associated with its underlying funds, which may invest in stocks (including stocks issued by REITs), bonds, cash, inflation-linked investments, commodity-linked investments, long/short market-neutral investments, and leveraged absolute return investments.

The Managed Payout Fund may not be appropriate for all investors. For example, depending on the time horizon, retirement income needs, and tax bracket, an investment in the Managed Payout Fund might not be appropriate for younger investors not currently in retirement, in IRAs or other tax-advantaged accounts for those investors under 59½, or for participants in employer-sponsored plans. Investors who hold the Managed Payout Fund within a tax-advantaged retirement account should consult their tax advisors to discuss tax consequences that could result if payments are distributed from their core account prior to age 59½ or if they plan to use the Managed Payout Fund, in whole or in part, to meet their required minimum distribution (RMD) obligations. Distributions from the Managed Payout Fund are unlikely to precisely match an investor's IRA RMD obligations. In addition, use of the Managed Payout Fund may be restricted in employer-sponsored plans by the terms of the governing plan documents and/or at the discretion of the plan administrator. Review the information carefully with your financial advisor before deciding whether the Managed Payout Fund is right for you.

The fund's monthly distributions per share are calculated as of January 1 of that year and are generally expected to be fixed during the year.

Before investing, consider the Managed Payout Fund's investment objectives, strategies, risks, fees, and expenses. Carefully read the prospectus that contains this information.


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