Series 7: 6.1.6.2 Withdrawal Plans

6.1.6.2  Withdrawal Plans

Investors may set up systematic withdrawal plans from their investment account, similar to automatic investment programs. Withdrawals are made first from dividends and then from capital gains. When those are gone, the fund will start redeeming shares if instructed to do so by the investor. Like automatic investment programs, systematic withdrawal plans use dollar-cost averaging. Withdrawals can be of several types:

• • Fixed-dollar periodic payments pay the investor a certain amount of money each time period, such as every month or every quarter. How long these payments will continue can be estimated but not known exactly because it