They can prove useful as one piece of the retirement-spending puzzle as long as you understand the goal of a particular fund. Getty Images By Eleanor Laise, Senior Editor April 1, 2019From Kiplinger's Retirement Report Managed payout mutual funds, which are designed to help retirees generate regular portfolio paychecks, are like the electric cars of the retirement industry: They seem so promising, and yet they've struggled to gain traction.SEE ALSO: The 25 Best Low-Fee Mutual Funds to Buy Now The funds had a rough start. They were first launched around the time of the financial crisis, which posed an immediate challenge to their payout strategies. A number of funds were liquidated or merged into other offerings. Managed payout funds will never be a complete retirement-spending solution. But for retirees willing to look under the hood, they may prove useful as just one piece of the spending puzzle. Each managed-payout fund family has its own quirks, so "it's important to read the fine print," says Jeff Holt, a director at investment-research firm Morningstar. In T. Rowe Prices's Retirement Income funds, for example, the date in the fund's name is meant to correspond to investors' retirement year. Fidelity's Simplicity RMD funds have a different twist: The year in the fund's name is meant to align with the year investors turn 70, as required minimum distributions kick in at 70½. Advertisement Funds that aim to generate a regular payout don't guarantee a steady income. The Vanguard Managed Payout fund, for example, targets an annual distribution rate of 4%. But the dollar amount of the fund's payout dropped 8% at the start of this year, says Matt Jiannino, head of quantitative equity product management at Vanguard. SEE ALSO: The 27 Best Mutual Funds in 401(k) Retirement Plans Investors considering such funds should not be "super-dependent on those payouts," Holt says. The Vanguard Managed Payout fund makes sense for investors who have their essential expenses covered with other cash flows, Jiannino says. The Fidelity Simplicity RMD funds, meanwhile, are designed primarily for people who intend to take only their RMDs from their retirement accounts, says Keith Bernhardt, vice president of retirement income at Fidelity. This article on managed payout funds is part of a broader story, How to Draw a Steady Portfolio Paycheck in Retirement, that first appeared in the April issue of Kiplinger's Retirement Report.