Reinvesting vs. collecting the income

[Focus]

Quote:

Originally Posted by Cobra9777 My comment was entirely related to portfolio withdrawal timing, not taxes.

Sorry if I muddied the waters. The fact that dividend/CG distributions are taxed no matter what played into my decision to switch in ER from reinvesting to paying out.

[mathjak107]

it really does not matter how you do it. if you reinvest the dividends and pull from a cash buffer then the equities compound over time.

but if yoo pull from a cash buffer so you can do that then the cash acts as a weight that isn't invested and it is a question of taking it from the left pocket or the right one.

personally i rather use the cash buffer. as 2008-2009 showed us dividends get slashed or cut just at the worst times. i want a smooth flow of income so i prefer the cash buffer to counting on dividends directly.

[pb4uski]

Quote:

Originally Posted by Kimo The 8% doesn't change according to the IRS office I was at.

8% is only from FRA to age 70 and it is simple, not compounded. IOW,, if your FRA is 66 and you wait until 70 then your benefit is 132% of your FRA benefit.

From 62 to FRA there is a less generous and more complicated formula.