A. Managed payout funds guarantee a set monthly payout which is very attractive to retirees. However, the amount you will receive usually fluctuate at regular intervals, usually annually. Typically, if a managed payout fund doesn't earn enough to make the monthly payout, part of the check it sends out will be a return of your capital.
How Does It Work?
Some managed payout funds aim to distribute all of your investment within a certain period, while others touch principal only when absolutely necessary, so it's important to choose the one that fits your needs.
Who Offers It?
Most brokerage houses offer managed payout funds - Vanguard, Fidelity, T.Rowe Price, Charles Schwab, the American Funds, etc.
Difference With Immediate Annuities
In the end, a managed payout fund is similar to immediate annuities, however, while you can sell shares of a managed payout fund at anytime, it can't guarantee fixed lifetime income.