5% Withdrawal Rate Portfolio

[Running_Man]

How long do you think it will take to gather enough data (across various market conditions, interest rates, asset valuation changes, etc) to make reasonable conclusions about a portfolio management method that is supposed to work for decades? I think it will take a very long time. Per a previous post:



Maybe give that type of simulation a shot.

I think simulations work great in theory. The problem is along the way say a year or two later a new theory comes along and that is used as the latest and greatest and the previous theory is thrown out as "oh yeah I improved that". See 75/25 portfolios with "value twist" or "REIT twist" or "small company twist" or "equal dollar weighting twist", there is always an adjustment to be made to an existing theory to show the theory was good and now this is better, depending on what has over/under performed the last 10 years or so!

It is much more informative I believe to have an actual portfolio selected and going to compare and state what is good as time goes by and what is bad. And then to look at actual experience and actual changes.

Financial markets right now are not comparable in any way to a time in the past in my opinion and to pretend it is by running simulations is not that useful for what I am trying to show, that is a small portfolio needing a 5% withdrawal in order to be able to live better than otherwise possible while still being relatively safe.

I think as quarters go by it will actually be very informative.

 

[Running_Man]

Ok time for the 2nd Quarter 2015 Update:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo

Portfolio Value @ 6/30/15: $34,978.22
DNP : $23,333.88 --- 2,308 Shares
SDOG: $5,499 ----- 150 Shares
RVT : $ 5,791.80 ------- 420 Shares
MMKT : $353.54

Distributions received since last report:$625.00 Payments:$450.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 6/30/15: $35,296.87

VWLEX $34,096.87 878.79 Shares
MMKT: 1,200.00

Distributions reinvested since last report: $212.24 5.38 Shares@ 39.47
__________________

 

[Koolau]

I truly crave a "set and forget" strategy that insures continued ER bliss (financially). I've come to accept that no such animal actually exists, since there are so many variables and such potential for black swans or other surprises. Not to get political, but the gummint can put a pretty big hole in just about any plan at the change of a law (or should I now say - at the stoke of a pen or picking up of a phone - okay, okay, I said "not to get political.") With this in mind, my recommendation to the early retiree (we're talking someone with at least a 30 year potential retirement ahead of them) would be NOT to ER if they will need a 5% WR. If for some reason they find themselves "retired" (an action word!) I think they will need to find something to fill in the gaps (aka w*rk) or else find yet more "fat" to cut from the ER budget. I wouldn't feel comfortable any other way. If the idea is to NOT need to depend totally upon SS in the 70's and 80's (as Running_Man alluded to) AND enjoy a 30+ year retirement, a single strategy for a 5% WR seems very unlikely to work for the required time period. A more direct way (as mentioned by others) would be to use an annuity - but they have their failings as well. If I ever feel the need to go the annuity route, I would plan to purchase them over time (different companies, each successive annuity with a "shorter" pay-out with potentially higher payments, etc.) Other than that, I simply see no substitute for a "well funded" and "balanced" stash from which to draw a <4% annual. And even THEN, we have no guarantees in this life (beyond death and taxes.)

Having said all that, I enjoyed Running_Man's exercise AND I will continue to watch with great interest for updates. Hey, miracles still happen. YMMV

 

[Totoro]

I truly crave a "set and forget" strategy that insures continued ER bliss (financially). I've come to accept that no such animal actually exists, since there are so many variables and such potential for black swans or other surprises.

+1

The future is uncertain. Consequently also your portfolio returns, regardless of strategy.

All we can do is adopt a degree of optimism based on what has happened before, and a best guess of what might happen in the future.

I guess that's why we can all keep writing and thinking about these things

 

[Htown Harry]

Running_Man,

Will you alter your plan at all if the RVT distribution uses a return of capital to make the 7% distribution in a given year? This happened as recently as 2011, according to Morningstar.
http://quicktake.morningstar.com/advisor/cef/amcp/distributions?t=RVT®ion=USA&culture=en-US

In other words, how does your Rule 5 square up with a CEF distribution containing a return of capital component?

5) Payments are only made from distributions and shares are to never be sold to meet distribution,

More generally, why RVT out of the universe of closed end equity funds?

I don't follow equity CEFs closely, but ADX (formerly Adams Express) comes to mind as an alternative to RVT for comparison purposes. Longer history (since 1928), comparable expenses, 6% distribution policy, bigger discount.

 

[Running_Man]

Running_Man,

Will you alter your plan at all if the RVT distribution uses a return of capital to make the 7% distribution in a given year? This happened as recently as 2011, according to Morningstar.
http://quicktake.morningstar.com/advisor/cef/amcp/distributions?t=RVT®ion=USA&culture=en-US

In other words, how does your Rule 5 square up with a CEF distribution containing a return of capital component?

More generally, why RVT out of the universe of closed end equity funds?

I don't follow equity CEFs closely, but ADX (formerly Adams Express) comes to mind as an alternative to RVT for comparison purposes. Longer history (since 1928), comparable expenses, 6% distribution policy, bigger discount.

I Selected RVT because I wanted to get exposure for this portfolio to small stocks with SDOG providing the exposure to large stocks. This is a managed investment closed end firm that was selling for a 15%+ discount to net assets and still does today and has outperformed the Russell since 2000, though recent performances have been under the Russell and the extra value received on the distribution of assets not marked to market (8% X $2.05) or .16 per year is more than the fees on the fund (.006 X 15.62) = .094 cents. In other words I am being paid a 1/2%on my money to believe the managers can outduel the Russell 2000 in the long run.

I do not consider it to be selling shares when a company pays a distribution that for tax purposes is considered a return of capital.

I did not go with Adams express because though I equally like that fund it is a large cap fund. I did consider it strongly instead of SDOG, but I really like the investment rules for SDOG, and believe it will beat the S&P500 over the long run.

 

[Running_Man]

To Koolau's point, in general I agree with what he is stating. However, I found too many people in my life I have come across that had little in savings and instead of optimizing the amount they had, spend that down and end up with only social security. According to statistics this is 23 percent of married couples and 46 percent of single retirees, which I think shows when one spouse dies the portfolio is quickly consumed. I think even just a $150 a month income is huge when it is additional to a $1500 - $2000 per month social security payment, which is where many of those on only social security find themselves.

Since this is an actual portfolio I own, I can honestly talk to anyone I invest this way for myself, and this is a better way than fixing your son's roof. Personally I believe that the portfolio will be able to maintain a consistent payout for a long time, but while there are a million things that can go wrong, I just need them to hold off for 30 years.

 

[Running_Man]

Ok time for the 3rd Quarter 2015 Update:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo

Portfolio Value @ 9/30/15: $31,011.31
DNP : $20,656.6 --- 2,308 Shares
SDOG: $5,056 ----- 150 Shares
RVT : $ 4,779.60 ------- 420 Shares
MMKT : $518.61

Distributions received since last report:$615.08 Payments:$450.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 9/30/15: $33,476.83

VWLEX $32,726.83 884.51 Shares
MMKT: 900.00

Distributions reinvested since last report: $213.54 5.72 Shares@ 37.31
__________________
__________________
Share prices fell 5.1 percent for the Wellington portfolio in the quarter outpacing the 12.8% decline in the DNP portfolio - as oil and gas stock holdings along with the position in MLP's held got hammered.

 

[Running_Man]

Ok time for the 4TH Quarter 2015 Update:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo

Portfolio Value @ 12/31/15: $31,676.46
DNP : $20,656.6 --- 2,308 Shares
SDOG: $5,056 ----- 150 Shares
RVT : $ 4,779.60 ------- 420 Shares
MMKT : $720.88

Distributions received since last report:$652.27 Payments:$450.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 12/31/15: $34,313.11

VWLEX $34,013.11 924.52 Shares
MMKT: 300.00

Distributions reinvested since last report: $213.54 5.72 Shares@ 37.31
__________________
__________________

 

[Running_Man]

Ok time for Annual Portfolio Adjustment:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo

Portfolio Value @ 02/29/16: $33,117.23
DNP : $22,503 --- 2,308 Shares
SDOG: $5,391 ----- 150 Shares
RVT : $ 4,510.80 ------- 420 Shares
MMKT : $720.92


---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 02/29/16: $32,986.93

VWLEX $32,986.93 924.52 Shares
MMKT: 0.00

Shares@ 35.68
__________________
The CPI all items inflation index has increased 1.4% over the last 12 months ending January so the increase for the payout is increased to $152.00 (rounded to nearest dollar)
This resulted in the need for $1824 in the Wellington portfolio so 51.12 shares are sold and the funds placed in MM account. There are now 873.40 shares in the Wellington Portfolio, an increase of 5.1 shares over the course of the year.

For the Running Man portfolio an additional 3 percent of shares in DNP (70) were purchased @ 9.74 with a $7.99 commission for a total of $690.49 leaving $30.43, of which $2.00 will be needed as the increased dividend for DNP will not begin until the March 25th ex dividend date for April 10th payout. RVT and SDOG were left as is, at 13.6% and 16.3% of portfolios they are within a good range of the 16.7% desired amount, if RVT continues falling may have to buy shares next year, let's see what happens. So there are now 2,378 shares of DNP paying monthly dividend of $154.57 for the $152 monthly payment. The cap for payout will rise to $159.13 for 2017 when the portfolio's will next be realigned.

Overall a draw between these two portfolio's as both dropped about $3,000 in value for the year. Quarterly reporting will continue in March.
__________________
Running_Man is invisible Report Post

 

[Running_Man]

Ok time for the 1st Quarter 2016 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2016 $152.00/mo
Total Distributions:--------------$1,952.00

Portfolio Value @ 03/31/16: $34,665.45
DNP : $23780 --- 2,378 Shares
SDOG: $5,838 ----- 150 Shares
RVT : $ 4,909.80 ------- 420 Shares
MMKT : $137.65

Distributions received since last report:$259.22 Payments:$152.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 03/31/16: $34,416.53

VWLEX $32,744.53 878.81 Shares
MMKT: $1,672

Distributions reinvested since last report: $199.14 5.41 Shares@ 36.80



A good quarter for the RunningMan Portfolio as the rebound in oil related issues in the quarter brought both portfolios to the same relative value after one year. The increase in dividends due to the 70 additional shares of DNP begins with month of April.

 

[Running_Man]

Ok time for the 2nd Quarter 2016 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2016 $152.00/mo
Total Distributions:--------------$2,408.00

Portfolio Value @ 06/30/16: $36,535.18
DNP : $25254.36 --- 2,378 Shares
SDOG: $5,983.5 ----- 150 Shares
RVT : $ 4,943.4 ------- 420 Shares
MMKT : $353.92

Distributions received since last report:$620.41 Payments made 456.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 06/30/16: $34,958

VWLEX $33,742.88 884.71 Shares
MMKT: $1,216

Distributions reinvested since last report: $222.34 5.90 Shares@ 37.69



The rebound in the Running Man portfolio continues as the value has surpassed the original starting point of the portfolio, primarily driven by the over performance of DNP Income with the recovery in the oil sector and since the portfolio started in March of 2015 DNP has out performed the S&P500 10% vs 2%.

 

[Running_Man]

Ok time for the 3rd Quarter 2016 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2016 $152.00/mo
Total Distributions:--------------$2,864.00

Portfolio Value @ 09/30/16: $36,466.26
DNP : $24,398.28 --- 2,378 Shares
SDOG: $6,235.50 ----- 150 Shares
RVT : $ 5,317.20 ------- 420 Shares
MMKT : $515.28

Distributions received since last report:$617.36 Payments made 456.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 06/30/16: $34,958

VWLEX $33,742.88 884.71 Shares
MMKT: $1,216

Distributions reinvested since last report: $217.64 5.67 Shares@ 38.37



A fairly flat quarter for the portfolios as we head into the final quarter.

 

[Sandy & Shirley]

SDOG has only been around since 2012 so it does not have any historical market crash data.

I’ve been looking for an alternative to DNP, not putting all of my eggs in one basket so to speak!

Your recommended portfolio is 2/3 DNP and 1/6 RVT and SDOG. I totally understand DNP, one of my favorites, but why the other two. Here is my personal research on all 3.

DNP has been around since 1987 and has never missed a single dividend, 6 cents per share at the start and 6.5 cents since 1997, and there have been some bonuses along the way. The green baseline on this graph indicates 6 cents a month as 72 cents a year and 6.5 cents as 7.8 cents a year. When the market crashed in 2008, the price of DNP dropped, but the dividends did not stop.

RVT has been around since 1997 and did continue its dividends during the 2000 downturn but not the 2008 downturn which caused its price to plummet.

SDOG has only been around since 2012 so it does not have any historical market crash data.

The dividend rates for DNP seem to be about 7%, RVT has a nicer 9% plus rate but is not reliable during crashes, and SDOG is unknown during crashes with only a 3% to 4% return.

So my question is why RVT and SDOG? Are there any other more reliable income sources? Guess this is why your portfolio split is 2/3, 1/6, 1/6!

 

[Running_Man]

SDOG is in the portfolio in order to provide large cap stock growth and RVT is for small cap stock growth. There are times either are in favor and the purpose of being 1/3 of the portfolio is to provide for inflation growth of the value of the portfolio. The dividends will hopefully over time be entirely provided by the investment in DNP.

RVT’s “dividend” is part of the distribution policy they took a few years back to distribute eight percent of the market price of the fund annually. Since it sells for a discount of 16% that means of the approximate dollar paid annually only 85 cents is in the stock price of the fund, more than offsetting the cost of managing the fund. The present value of the stocks in the portfolio is $15.46 vs stock price of $12.98.



If you check the Ishares website and the original prospectus for SDOG historical data was done for SDOG showing over performance in down markets. In general I expect it to beat the S&P500 on a total return basis, not because of the dividend itself.

DNP has been able to earn it’s payout for a very long time, this portfolio is designed for someone with not much money who needs a larger than average withdrawal rate. As such there is a speculative aspect to it and possible declines in income under several scenarios. Although so far despite starting at an all time high in the stock market it has performed fairly well. In recent weeks RVT has increased over 10 percent and SDOG has not been hurt by the increase in interest rates.

If I was forced to pick only one fund and had to put all of my money into that one fund I would select SDOG and live off the dividend distributions. Despite the high cost of the funds I think it is one of the single best ideas out there.

Since this portfolio was announced SDOG a subset of the S&P500 has outperformed the S&P500 15 percent to 7.5 percent, RVT has underperformed only recently waking up and has returned about 2 percent net.

 

[Running_Man]

Ok time for the 4th Quarter 2016 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2016 $152.00/mo
Total Distributions:———————$3,320.00

Portfolio Value @ 12/31/16: $36,950.43
DNP : $24,326.94 --- 2,378 Shares
SDOG: $6,310.50 ----- 150 Shares
RVT : $ 5,623.8 ------- 420 Shares
MMKT : $689.19

Distributions received since last report:$629.91 Payments made 456.00
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 12/31/16: $36,021.15

VWLEX $35,717.15 913.25 Shares
MMKT: $304.00

Distributions reinvested since last report: $897.23 22.87 Shares@ 39.24



Good quarter for RVT and Wellington as Wellington has nearly covered the distributions made from the start of the portfolio, The Running Man portfolio holds a slim 1.6% gain on the starting value of the portfolio.

 

[Running_Man]

Ok time for Annual Portfolio Adjustment:

For the real portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150/mo

Portfolio Value @ 02/29/17: $38,678.17
DNP : $25,397 --- 2,378 Shares
SDOG: $6,585 ----- 150 Shares
RVT : $ 6,001.80 ------- 420 Shares
MMKT : $694.33


---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 02/29/17: $36,959.17

VWLEX $36,959.17 913.25 Shares
MMKT: 0.00

Shares@ 40.47
__________________
The CPI all items inflation index has increased 2.5% over the last 12 months ending January so the increase for the payout is increased to $156.00 (rounded to nearest dollar)
This resulted in the need for $1872 in the Wellington portfolio so 46.26 shares are sold and the funds placed in MM account. There are now 866.99 shares in the Wellington Portfolio, a decrease of 6.4 shares over the course of the year.

For the Running Man portfolio an additional 64 shares in DNP were purchased @ 10.68 with a $4.99 commission for a total of $688.51 leaving $5.82, of which $4.00 will be needed as the increased dividend for DNP will not begin until the March 25th ex dividend date for April 10th payout. RVT and SDOG were left as is, at 15.5% and 17.0% of portfolios they are within a good range of the 16.7% desired amount, RVT had a very large bounce back in 2016. So there are now 2,442 shares of DNP paying monthly dividend of $158.73 for the $156 monthly payment. The cap for payout will rise to $163.90 for 2018 when the portfolio's will next be realigned.

Overall a very slight win in 2016 for the Running Man portfolio as RVT had a significant return but both are nicely above the starting portfolio value despite beginning in a month in 2015 at an all time high. Quarterly reporting will continue in March.

 

[Running_Man]

Ok time for the 1st Quarter 2017 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2017 $156.00/mo
Total Distributions:———————$3,780.00

Portfolio Value @ 03/31/17: $38,865.19
DNP : $26,373.60 --- 2,442 Shares
SDOG: $6,442.50 ----- 150 Shares
RVT : $ 5,880.00 ------- 420 Shares
MMKT : $169.09

Distributions received since last report:$628.41 Payments made 460.00
The withdrawal rate on the value of the portfolio is now 4.82%
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Wellington Portfolio for Comparison @ 3/31/17: $36,744.70

VWLEX $35,717.15 872.13 Shares
MMKT: $1,720

Distributions reinvested since last report: $206.34 5.14 Shares@ 40.17
The withdrawal rate on the Wellington portfolio is now 5.09%


14933

 

[Running_Man]

Ok time for the 2nd Quarter 2017 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2017 $156.00/mo
Total Distributions:———————$4,231.00

Portfolio Value @ 06/30/17: $39,762.27
DNP : $26,886.42 --- 2,442 Shares
SDOG: $6,400.50 ----- 150 Shares
RVT : $ 6,127.50 ------- 420 Shares
MMKT : $347.55

Distributions received since last report:$646.46 Payments made 468.00
The withdrawal rate on the value of the portfolio is now 4.71%
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Wellington Portfolio for Comparison @ 6/30/17: $37,199.20

VWLEX $35,951.59 877.94 Shares
MMKT: $1,248

Distributions reinvested since last report: $238.09 5.81 Shares@ 40.98
The withdrawal rate on the Wellington portfolio is now 5.03%

The Runningman portfolio had a slightly better 2nd Quarter than Wellington, but the market continues to close near record highs. As long as markets keep climbing there is little risk, interesting situations will develop with the next major market decline.

 

[Blue Collar Guy]

Ok time for the 2nd Quarter 2017 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2017 $156.00/mo
Total Distributions:———————$4,231.00

Portfolio Value @ 06/30/17: $39,762.27
DNP : $26,886.42 --- 2,442 Shares
SDOG: $6,400.50 ----- 150 Shares
RVT : $ 6,127.50 ------- 420 Shares
MMKT : $347.55

Distributions received since last report:$646.46 Payments made 468.00
The withdrawal rate on the value of the portfolio is now 4.71%
---------------------------------------------------------------------
Wellington Portfolio for Comparison @ 6/30/17: $37,199.20

VWLEX $35,951.59 877.94 Shares
MMKT: $1,248

Distributions reinvested since last report: $238.09 5.81 Shares@ 40.98
The withdrawal rate on the Wellington portfolio is now 5.03%

The Runningman portfolio had a slightly better 2nd Quarter than Wellington, but the market continues to close near record highs. As long as markets keep climbing there is little risk, interesting situations will develop with the next major market decline.

This is the first time I read your Running man series. I love these type of updates, I wish you continued success.

 

[Running_Man]

Ok time for the 3rd Quarter 2017 Update:

For the real RunningMan portfolio I proposed as a 5% withdrawal portfolio with someone of very minor savings ($36,376):

Payments Began March 15, 2015 $150.00/mo
Current Distribution:-- 3/5/2017 $156.00/mo
Total Distributions:———————$4,387.00

Portfolio Value @ 09/30/17: $41,805.29
DNP : $28,034.16 --- 2,442 Shares
SDOG: $6,610.5 ----- 150 Shares
RVT : $ 6,631.80 ------- 420 Shares
MMKT : $528.83

Distributions received since last report:$649.28 Payments made 468.00
The withdrawal rate on the value of the portfolio is now 4.47%
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Wellington Portfolio for Comparison @ 9/30/17: $37,853.55

VWLEX $37073.55 883.12 Shares
MMKT: $780.00

Distributions reinvested since last report: $216.85 5.19 Shares@ 41.82
The withdrawal rate on the Wellington portfolio is now 4.95%
The Runningman portfolio had a better 3rd Quarter than Wellington, as RVT had a nice 8.2% increase after a 2% dividend in the quarter and the market continues to close near record highs. As long as markets keep climbing there is little risk, interesting situations will develop with the next major market decline. While the Running Man portfolio is performing to my highest hopes, nothing mean nothing until you have gone through a significant downturn and that has not happened.

Interesting to note that the DNP/SDOG/RVT have all risen together and over 2 1/2 years maintained a 66.5/16.5/16.5 ratio and no balancing among SDOG and RVT has occurred

 

[Sandy & Shirley]

Some Tax Questions
​

I have followed your thread and I have invested in all 3 symbols because of it. Those investments are currently in our Traditional IRAs, but our Minimum Required Distributions will slowly start pushing those investments into standard brokerage accounts.

Can you take some time and let us know the breakdown of the “dividends” you generally receive? Are they normally Qualified Dividends, Return of Capital, Long or Short Term Capital Gains, etc.?

Also, how are each of these categories handled for tax purposes?

Do you generally automatically re-invest the dividends or take them as cash to reinvest?

What does all of this do to the cost basis of the investments?

 

[Running_Man]

Surely you can’t be serious,

For DNP — it is considered a managed distribution fund and has 3 types of distributions:
1) Dividends (income) Capital Gains and Return of Capital. In 2016 of the total distributions of 78 cents 8 cents was a return of capital and is not taxable and instead reduces the tax basis of your investment, 36 cents was income and of that 81% or 29 cents is considered qualified dividend eligible for the lower dividend rate. The remainder is capital gains and whether or not in a given year it is given long term capital gains treatment or considered ordinary income is dependent on the amount of offsetting losses DNP takes within the fund and is spelled out annually in the 1099DIV statement. This was 34 cents in 2016, but all three areas of distribution vary from year to year depending on annual results as does the percentage of dividends eligible for qualified dividends.

I take all dividends to reinvest as cash. Reinvest them in DNP which results in new shares with their own basis. I track my basis in a spreadsheet so I know the tax basis of every share I own.

SDOG distributions generally are all qualified dividends.

RVT distributions are a combination of qualified dividends, short term capital gains, long term capital gains and return of capital in 2016 it was about 13 cents dividend 86 cents long term capital gain 2 cents short term capital gains with no return of capital. Again this will vary depending on results of the fund.

In general taxes are very individualized and you should determine for yourself the tax implications of these investments if they were held in a taxable account.

 

[pb4uski]

[-]Surely[/-] Shirley you can’t be serious, ....

Fixed it for you.

 

[cooch96]

If I make it to 70, and medical science hasn’t made any extraordinary leaps in the next couple of decades, I’d be very comfortable with a 10% wr. And it would have to something revolutionary we haven’t seen since penicillin. Most men in my family, both sides, pass in their 60s or early 70s. If I make it to 80, pop the champagne and go to 20%.