Yes, there is no restriction preventing one from opening the Retirement Income 2020 Fund within a taxable account registration.
The T. Rowe Price® Retirement Income 2020 Fund
Consider the T. Rowe Price Retirement Income 2020 Fund (TRLAX), designed for people in or nearing retirement, who are looking for regular monthly payouts from their investments. In addition to ongoing monthly dividend income, you'll enjoy the convenience of an all-in-one fund with ready access to your money when needed.
Automatic monthly payments
The fund’s managed payout strategy is designed to provide a stream of predictable monthly distributions throughout retirement, targeting 5% annually.
No additional fees or commissions
You only pay the expenses of the underlying funds.
Freedom to withdraw additional funds
You enjoy access to your money whenever you need it.
Increase (or reduce) your monthly payouts
You can adjust your monthly retirement income stream by adding or removing investment assets.
The annual payout for the following calendar year is calculated September 30th of each year. This monthly distribution varies from year to year based on the fund’s performance and the number of fund shares held in the account.
- The total calendar-year distribution amount is determined by calculating 5% of the fund’s average net asset value (NAV) over the trailing five years.
The fund automatically makes 12 equal monthly dividend payments to investors each calendar year.
|Initial Investment||2017 Monthly Distribution||2018 Monthly Distribution||Remaining Account Balance*|
*Assuming Initial Investment on August 1, 2017 remained intact without additions or deductions. Account balance after 13th payment (December 31, 2018).
This hypothetical example shows how a managed payout strategy was able to consistently pay distributions without meaningfully depleting the balance – despite two recessions.
The results shown are hypothetical, do not reflect actual investment results, and are not a guarantee of future results. Hypothetical results were developed with the benefit of hindsight and have inherent limitations. Hypothetical results do not reflect actual trading or the effect of material economic and market factors. The results shown on this page are based on index returns and are not indicative of any T. Rowe Price investment. Investors cannot invest directly in an index.
*There is no guarantee of principal for investors and no guarantee that the fund will provide a fixed or stable level of cash distributions at any time or over any particular period of time. Any fund redemptions, including redemptions made prior to the target date, will proportionately reduce the amount of future cash distributions to be received from the fund. If the long-term total return of the portfolio exceeds the 5% payout rate, the portfolio’s principal should be maintained over the long-term. However, in certain years when the portfolio return is less than the payout rate, the annual payout may include a drawdown on investment principal and some distributions may be treated, in part, as a return of capital.
Key assumptions: Individual retires on December 31, 1999 at age 65 with a retirement account balance of $300,000. Total allocation at retirement is 55% equities and 45% fixed income. Equity allocation is 70% U.S. equities and 30% non-U.S. equities. The Russell 3000 Index is used for U.S. equity returns, the MSCI ACWI ex-U.S. for non-U.S. equity returns, and the Bloomberg Barclays U.S. Aggregate Bond Index is used for fixed income returns. Payouts start January 2000 at 5% of the 60-month average account balance and continue to December 2018. State and federal tax withholding are not included in monthly cash flows.
A leader in target date fund design since 2002, T. Rowe Price has applied that expertise to developing an income-generating solution for retired investors with the Retirement Income 2020 Fund. The underlying investments in the fund take advantage of our strategic investing approach, driven by independent thinking and rigorous field research. Our efforts are singularly focused on helping you invest confidently.
The principal value of the fund is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the fund. If an investor plans to retire significantly earlier or later than age 65, the fund may not be an appropriate investment even if the investor is retiring on or near the target date. The fund’s allocations among a broad range of underlying T. Rowe Price stock and bond funds will change over time. Diversification cannot assure a profit or protect against loss in a declining market. The fund emphasizes potential capital appreciation during the early phases of retirement asset accumulation, balances the need for appreciation with the need for income as retirement approaches, and focuses on supporting an income stream over a long-term postretirement withdrawal horizon. The fund is not designed for a lump-sum redemption at the target date and does not guarantee a particular level of income. The fund maintains a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons. There is no guarantee that the fund will provide adequate income at and through your retirement. The fund’s monthly cash distributions will reduce the amount of assets available for investment by the fund. In certain years, achieving the targeted annual payout rate through twelve equal monthly dividend payments may result in a drawdown on investment principal and some distributions may be treated in part as a return of capital. For all of these reasons, there is no guarantee of principal for investors and no guarantee that the fund will provide a fixed or stable level of cash distributions at any time or over any particular period of time. Any fund redemptions, including redemptions made prior to the target date, will proportionately reduce the amount of future cash distributions to be received from the fund.
The fund’s monthly distributions are not designed to comply with or satisfy any required minimum distribution rules applicable to retirement accounts, and shareholders receiving cash distributions from the fund within such accounts will need to consider the distributions, as appropriate, in the computation of their annual required minimum distribution.