Set up your Portfolio Income
Set up your portfolio withdrawals
1. Create a cash reserve
You'll need a place to put the money you're moving out of your investments. A low-cost, high-quality money market mutual fund can be a smart choice for this cash reserve. You can move the amount you expect to need for 12 months into your money market fund at one time. That way you can avoid having stock and bond market swings affect your immediate spending needs.
2.For taxable accounts, consider directing any dividends and capital gains distributions to your cash reserve money market fund, rather than reinvesting. This will help replenish your money market fund and can save on taxes. If you reinvest the distributions in the same funds, you'll likely have to pay taxes again when you later withdraw the money.
Direct your distribution
For tax-deferred accounts, like your traditional IRA, set up a withdrawal from your IRA to your cash reserve money market fund. As for how much to take from your accounts, a 4% annual withdrawal rate from a portfolio is reasonable for many retirees.After age 70½, you'll be required to take required minimum distributions (RMDs) from your traditional IRA. Direct that amount to your cash reserve money market fund every year.
3.You can electronically link your cash reserve money market fund to your bank account, so you can conveniently move money to your bank. For efficiency's sake, move a month's worth of expenses at a time. Once you have your withdrawals set up, it’ll be important to stay on track with your investment plan.
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.
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 All Invest Global mutual funds that cover a broad spectrum of the stock, bond, and international markets.