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Cash distributions and total return differ
Receiving cash is only one part of investment performance.
Ask where distributions come from
A high rate alone is not enough information.
Use the calculator as a scenario tool
Estimate cash flow separately from principal risk and long-term total return.
Cash distributions are not the same as investment return
Dividends and fund distributions can be useful cash flow, but total return still includes price or NAV changes, distributions, fees, and taxes. A high distribution yield can coexist with a falling asset value.
Match the cash-flow method to the life stage
Retirees may value predictable cash availability, while accumulators can focus more heavily on diversification, total return, and risk. A portfolio does not need to be converted entirely to high-yield assets just because monthly spending begins.
Keep a buffer
Distributions can change and markets can fall at the wrong time. A cash or lower-volatility reserve can reduce the need to sell growth assets during a downturn.