One common way to create retirement income is to construct a portfolio of stock and index funds (or work with a financial adviser who does this). The portfolio is designed to achieve a respectable long-term rate of return, and along the way, you follow a prescribed set of withdrawal rate rules that will typically allow you to take out 5% from the profit a month, and in some years, increase your withdrawal for inflation.
The concept behind “total return” is that you are targeting a short period of 1 to 5-year average annual return with monthly strategic withdrawal that meets or exceeds your withdrawal rate. Although you are targeting a long-term average, using monthly compounding strategy in any one year your returns will deviate from that average higher compared to any other fixed deposit or mutual fund investment. To follow this type of investment approach, you must maintain a diversified allocation regardless of the year-to-year ups and downs of the portfolio.