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10-22-2010, 04:11 PM
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#1
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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Dividends
The last four years I have been taking only the dividends from my taxable and leaving the dividends in my IRA to grow . Is this a smart move or would I be better off just having all my dividends going into my Money Market ? I use the dividends to pay living expenses and when I'm short I just sell some stock . Help me all you knowledgeable members .
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10-22-2010, 04:16 PM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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 Quote:
Originally Posted by Moemg
The last four years I have been taking only the dividends from my taxable and leaving the dividends in my IRA to grow . Is this a smart move or would I be better off just having all my dividends going into my Money Market ? I use the dividends to pay living expenses and when I'm short I just sell some stock . Help me all you knowledgeable members .
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You aren't yet old enough to take dividends from the IRA without the 10% penalty, are you?
Ha
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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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10-22-2010, 04:32 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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well dividends in a taxable account get the special income tax treatment - at least through this year. After this year, we'll just have to see what congress does to the tax code.
The IRA dividends - when you liquidate them get taxed at ordinary income tax rates.
So yes I believe that you are doing it correctly.
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10-22-2010, 04:35 PM
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#4
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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Quote:
Originally Posted by haha
You aren't yet old enough to take dividends from the IRA without the 10% penalty, are you?
Ha
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I'm 62 so I can take them I'm not sure if it is a smart thing to do . I still have a lot of losses to cover most of my gains when I sell stocks so maybe I just answered my own question.
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10-22-2010, 05:24 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,698
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Ha, you are a real ladies man.
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10-22-2010, 08:15 PM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,037
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__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
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10-23-2010, 03:46 AM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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IMO - It is all about managing taxes and minimizing the tax burden. There are often several routes that lead to the same tax burden. But there are usually trade-offs (other than taxes) related to a specific persons options on how to approach it. Often people have certain constraints the push them one way or the other.
Projecting the income stream and tax hit along the way is the only way I know of to do the tax analysis. The oft cited I-Orp help with some of the drudgery.
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10-23-2010, 07:13 AM
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#8
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Gone but not forgotten
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 11,447
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Quote:
Originally Posted by chinaco
IMO - It is all about managing taxes and minimizing the tax burden. There are often several routes that lead to the same tax burden. But there are usually trade-offs (other than taxes) related to a specific persons options on how to approach it. Often people have certain constraints the push them one way or the other.
Projecting the income stream and tax hit along the way is the only way I know of to do the tax analysis. The oft cited I-Orp help with some of the drudgery.
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Thanks , I'm going to run both scenarios through TAX Act as see how each plays out .
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10-23-2010, 02:04 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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At 62 you can take any amount of out of an IRA/401k you please. The question of the dividend exclusion no longer effectivly applies.
One thing to look at is take the value of the Ira and figure out what the RMD would be at 70.5 (use the IRS mortality table) and assume some gain per year. With this figure out the required withdrawls. Consider that by age 70 you will also be getting SS and that likley the RMD's will make it taxable as well.
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10-23-2010, 05:11 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
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Quote:
Originally Posted by Moemg
The last four years I have been taking only the dividends from my taxable and leaving the dividends in my IRA to grow . Is this a smart move or would I be better off just having all my dividends going into my Money Market ?
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I'm trying to parse this. You can have an IRA money market account, if you like. Then the choice would be whether to put the dividends into an IRA money market fund or a non-IRA money market fund. IRA, I would think, but then I think IRAs are a great deal, generally speaking.
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Greg (retired in 2010 at age 68, state pension)
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