marko
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Mar 16, 2011
- Messages
- 8,427
Forgive me if this has been covered before...
I have 30% of my portfolio in after tax funds (i.e. not sheltered in an IRA) and the balance in my IRA. I will have enough to live on via my dividends between the two sources. ‘After tax’ funds deliver about 5.7% in dividends. 25% tax bracket.
As I near my 59 ½ withdrawal age, I’m torn: should I withdraw from the IRA dividends and pay the taxes or should I sell shares of my ‘after tax’ funds and not pay taxes? (taxes on those share sales would be minimal due to my basis)
My after tax funds would last me about 6-7 years before needing to tap my IRA but I’m terrified of ‘touching the principal’. To me once you sell a share, it’s gone for good.
In 6 years, my after tax piece would be gone but, having not paid taxes for those years might put me in a better place.
The original plan was to live on the dividends, pay the taxes and draw minimally from the after tax fund as inflation and other costs creep up over a longer period of time.
Any insights?
I have 30% of my portfolio in after tax funds (i.e. not sheltered in an IRA) and the balance in my IRA. I will have enough to live on via my dividends between the two sources. ‘After tax’ funds deliver about 5.7% in dividends. 25% tax bracket.
As I near my 59 ½ withdrawal age, I’m torn: should I withdraw from the IRA dividends and pay the taxes or should I sell shares of my ‘after tax’ funds and not pay taxes? (taxes on those share sales would be minimal due to my basis)
My after tax funds would last me about 6-7 years before needing to tap my IRA but I’m terrified of ‘touching the principal’. To me once you sell a share, it’s gone for good.
In 6 years, my after tax piece would be gone but, having not paid taxes for those years might put me in a better place.
The original plan was to live on the dividends, pay the taxes and draw minimally from the after tax fund as inflation and other costs creep up over a longer period of time.
Any insights?