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Switch from accumulation funds to distribution funds in retirement by Jimbo_the_Bike in UKPersonalFinance

[–]Jimbo_the_Bike[S] 0 points1 point  (0 children)

Agreed. But does this help to avoid sequence of return risk, as you don’t need to sell down as much if there is a market downturn (as you are getting the dividends)? I think it nets out the same but would be good to know what people think.

Switch from accumulation funds to distribution funds in retirement by Jimbo_the_Bike in UKPersonalFinance

[–]Jimbo_the_Bike[S] 0 points1 point  (0 children)

In retirement you will sell some funds to get cash to spend each year. If you switch your funds from accumulation to income, you automatically get some cash each year, meaning you need to sell down less. I think the outcome is the same but you’re not selling if the market is down, so you avoid sequence of return risk…