The thing about how dividend income inside an IRA is taxed at a different rate than outside an IRA is completely new to me, ...
Actually, dividend income inside an IRA is not taxed at all.
The thing that is taxed is withdrawals from the IRA.
The thing about how dividend income inside an IRA is taxed at a different rate than outside an IRA is completely new to me, ...
Actually, dividend income inside an IRA is not taxed at all.
The thing that is taxed is withdrawals from the IRA.
If you are comfortable with all your eggs in one basket, consider a blue chip stock. AT&T has consistently paid $0.50/share/quarter ($0.51/share/quarter this year). With today's close of $39.38, $315K would buy about 7998 shares. 7998 x $2.04/year = $16,315.92 in dividends.
You need to look at more than the "funds" and work out the risk/benefit in your situation. $16K/year versus $8K/year might be worth a bit of risk.
Perhaps look at some other relatively stable stocks?
If you are comfortable with all your eggs in one basket, consider a blue chip stock. ...
If you are comfortable with all your eggs in one basket, consider a blue chip stock. AT&T has consistently paid $0.50/share/quarter ($0.51/share/quarter this year). With today's close of $39.38, $315K would buy about 7998 shares. 7998 x $2.04/year = $16,315.92 in dividends. ...
I'd like to have the IRA generate a passive income of $10k-$12k/year.
Is it possible to generate that kind of an income by putting the entire balance of $315K into a single income-producing mutual fund?
We should stop right there - no one in their right mind should be "comfortable" with all their money in a single stock, "blue chip", or otherwise. In other words, that is bad, terrible, awful advice. But considering your caveat, it applies to no one, so it isn't advice at all.
In the past 20 years, blue-chip AT&T was a terrible investment. Here is the total return of "T" (Port #2 in RED), compared to a 100% S&P index (Port #1 in BLUE) , and a 70/30 S&P and Total Bond (Port# 3 in YELLOW). T under-performs and has higher volatility. It stinks up the place.
Diversify, that is an extremely important rule.
http://bit.ly/2O6Mfij << short link to portfolio analyzer
-ERD50
I have and like Vanguards Wellesley ....
It's more accurate to think of everything in the IRA now as something which will be Taxed at your tax rate when you receive the money. That means your withdrawals could end up being taxed at several rates, depending on other income you happen to receive in a given year.The thing about how dividend income inside an IRA is taxed at a different rate than outside an IRA is completely new to me, so extra thanks to the person who posted that info.
That is a great recommendation for the OP... a conservative income fund... put the entire $315k in Wellesley with dividends and capital gains distributions reinvested and set up an automatic redemption of $1,000/month to your checking account.... set it and forget it other than to periodically increase the monthly amount for inflation.
According to Portfolio Visualizer, if you had done this 10 years ago that $315k, even after withdrawals adjusted for inflation, would be worth $677k at the end of October.
https://www.portfoliovisualizer.com...ividends=true&symbol1=VWIAX&allocation1_1=100
I have and like Vanguards Wellesley (Conservative ROTH IRA Mutual Fund) with approx. $210,000 and in 2018, it generated
4 quarterly dividends of
$1,200 March, $1,400 June, $1,400 Sept. and $1,700 Dec.
Plus Long term Capitol gains of $7,300
But those numbers can move around a bit.
The Previous year, 2017 there were $200 and $2,000 Short / Long CG
but the quarterly dividends were pretty close to 2018.
My more moderate fund, Wellington is similar, but dividends are a bit less, by a couple hundred, but I only have about 120K there, so halve those numbers.
I reinvest everything, but pay taxes on the Wellington Distributions, coz it's just my taxable mutual fund.
Interesting. Thoughts on Pimco Income, PIMIX?
If I you compare it to VAN Wellesley that same time period it comes out on top. Or better yet if you include the 08/09 recession, so a 2007-2019 range the performance gap is even greater.
https://www.portfoliovisualizer.com...cation1_1=100&symbol2=PIMIX&allocation2_2=100
I am a huge fan of Vanguard products but have been struggling on the PIMIX fund when I stumbled on its performance - how much should I allocate, etc.. interestingly there seem to be few mentions of it or fans from what I can tell. Not sure why.
Your withdrawal Amount is annual not monthly
I really know nothing about investing and trying to make enough to retire in 5 years. How do i find a good investment advisor who can be trusted .
I really know nothing about investing and trying to make enough to retire in 5 years. How do i find a good investment advisor who can be trusted .
+1Maybe not what you want to hear, but if you really want to learn about investing, read some of the many, many posts on this forum. An adviser won't teach you anything. You won't know if the adviser is doing right by you if you don't understand basic investing concepts and what you're hoping to achieve (growth, cash flow, a blend, etc.).
I really know nothing about investing and trying to make enough to retire in 5 years. How do i find a good investment advisor who can be trusted .
Yes like all the abbreviations and terminologies used what they mean . I have a few annuieties which i didnt know any better, some rental properties a 401 k and emergency funds in savings. But just not sure it will generate enough to not run out of money. Health ins scares me the most!