Definition of Withdrawal Plan
A regular removal of funds from a mutual fund account is called withdrawal plan. These plans have various types and are available among different fund organizations. Investors who have deposited money in mutual fund or any other fund for a specific purpose; let’s say retirement will often withdraw money from their fund to provide current income. This income will be used for meeting their monthly expenses.
Explanation of Withdrawal Plan
You have $200,000 in your pension fund. After retirement you start to take out $5000 every month.
Mutual fund accounts, brokerage accounts and annuities are three major investments for which systematic withdrawal plans are used.