Income Investing Results - February 2026

[joejetski]

I did make some adjustments. Decrease of FSCO (timely), Increase in some of my Pimco's (likely too early).

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I am also evaluating my SS timing, but will wait 3-4 months for decision as I don't want current conditions (short term) to completely drive decision. Start of SS has always been a potential, saving/reducing Retirement Portfolio WD's.

I'm looking at the difference between various start date/years vs FRA (in the chart, the 20 yr diff from FRA means how much more over that 20 years I would get if I waited until FRA). The 20 yr Gain/Loss takes in to account the amount of SS taken PRIOR to FRA and assuming an 80% impact/decrease on IRA WD's (IOW, still taking about 20% of what I would have without SS), and looking 20 years forward from FRA which is longer than either parents lifespan and reasonable IMO since I have fought and (for now) won a PNET cancer battle. A guess for sure, but

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Flieger

Is most of your IRA pre tax or Roth? Will you be using SS to pay taxes on conversions? How about RMDs? Do you have legacy goals/requirements on your portfolio for heirs?

 

[Flieger]

Is most of your IRA pre tax or Roth? Will you be using SS to pay taxes on conversions? How about RMDs? Do you have legacy goals/requirements on your portfolio for heirs?

Almost all is pre-tax. I have less than 6 figures in Roth and HSA. I likely won't do a lot of conversion as my effective tax rate going forward (based on today's rates) will be ~6-7% total. If things work out good/well, there should be something for heirs, but that is not my primary goal. Getting them the education and ability to take care of themselves was primary and was completed.

Flieger

 

[Flyfish1]

If things work out good/well, there should be something for heirs, but that is not my primary goal. Getting them the education and ability to take care of themselves was primary and was completed.

And that is the priority IMO. You gave them a good head start and that's the job. Enjoy retirement.

 

[joejetski]

Almost all is pre-tax. I have less than 6 figures in Roth and HSA. I likely won't do a lot of conversion as my effective tax rate going forward (based on today's rates) will be ~6-7% total. If things work out good/well, there should be something for heirs, but that is not my primary goal. Getting them the education and ability to take care of themselves was primary and was completed.

Flieger

Thanks for the response. I am in a similar age as Flyfish (62) retiring at end of year. My situation may be a little different from many folks here. 2nd marriage, wife 10 years younger with autistic adult son who will likely live with us. Am delaying SS to max out spousal survivor benefit, and she will also get a 50% FERS Pension when I pass. My goal is to spend down TIRA, as well as move from TIRA - Taxable over next 4 years. Then, when wife retires, do some Roth Conversions. Take SS at 70. Then wife collects SS and FERS penision. Goal is to preserve DWs portfolio for autistic son. Somewhere between 70-75, I will start gifting to daughter and granddaughters as our spending slows. Use my TIRA remainder to self finance LTC and/or grandkids legacy. Pass on Roth to wife.

 

[COcheesehead]

I like ARCC at this price and initiated a small position last week.

Bold move.

 

[TheQuestionGuy]

Do Dividend Funds get discussed here a lot?
Some boards view these as a great part of a portfolio and others do not.
What is the majority here?

 

[fire_medic_730]

Dividend producing funds are only part of our portfolio. We average about $3500 a month in dividends. Re invested now but in the near future will be taken as income. I structured the Dividend Portion of our portfolio to replace DW's income when she retires fully. She has semi retired and we have not seen any issues with this methodology. Waiting for our taxes to come back from the CPS because we will be doing some conversions with her Semi and then Fully Retired. My Disability Pension is Non Taxable Income and my SS is only taxed at a small %.

 

[Flieger]

Do Dividend Funds get discussed here a lot?
Some boards view these as a great part of a portfolio and others do not.
What is the majority here?

There's couple of threads discussing CEF's and this one discussing Income Portfolios. They are restarted each month (although I just remember I did not start a March thread) so I suggest doing a search and take a look.

Flieger

 

[dobig]

Do Dividend Funds get discussed here a lot?
Some boards view these as a great part of a portfolio and others do not.
What is the majority here?

Dividends are the Devil!

...or so we're told.

Myself and some others are dividend growth etf investors. DGRO, SCHD, VYM, etc,. Don't want to hijack Flieger's thread so if you want to discuss or have questions look for one of the recent dividend threads or start a new one.

And don't worry. No matter how loud the groans of the total return investors, we're more than happy to have a discussion.

 

[Flyfish1]

Dividends are the Devil!

...or so we're told.

Myself and some others are dividend growth etf investors. DGRO, SCHD, VYM, etc,. Don't want to hijack Flieger's thread so if you want to discuss or have questions look for one of the recent dividend threads or start a new one.

And don't worry. No matter how loud the groans of the total return investors, we're more than happy to have a discussion.

Ha! Love that response.
I am now a dividend/income investor, changed from index buy a hold a wee bit before I retired. It creates a great income stream that lets us live a wonderful retirement. Happy to discuss with total return people. Nothing wrong with index TR investing, heck I did it for most of my life but you can tweak your income a bit in retirement by keeping your mind open to other options. No need to put either side down , just respect other's opinions.

 

[ERD50]

Do Dividend Funds get discussed here a lot?
Some boards view these as a great part of a portfolio and others do not.
What is the majority here?

Well, that can open a can of worms. I can't say what the 'majority' view is, we only know of those who choose to post on the topic.

Some people here believe that high-dividend paying stocks/funds/ETFs have some 'special' properties that make them worth holding. Others recognize that dividends are essentially a 'forced sale', creating a taxable event (in a taxable account), while selling that amount yourself gives flexibility (in amount and timing - which can be important in managing taxable income), and tax is only due on the gains of the sale (which is less than 100%), while the entire dividend would be taxed (under the same circumstances).

And in general, concentrating on high-dividend paying stocks likely reduces your diversification.

edit/add - I didn't see the previous comments when I submitted - I'll just add, everyone is a "total return" investor. Total return is growth plus distributions, and that's the same for everyone. I find it confusing to say that anyone is a 'total return' investor, when we all are.

I find it more helpful and accurate to say that some here focus on high-dividend paying (or high-yield) investments. Same as some focus on tech, or precious metals, or real estate, etc.

 

[Flieger]

Well, that can open a can of worms. I can't say what the 'majority' view is, we only know of those who choose to post on the topic.

Some people here believe that high-dividend paying stocks/funds/ETFs have some 'special' properties that make them worth holding. Others recognize that dividends are essentially a 'forced sale', creating a taxable event (in a taxable account), while selling that amount yourself gives flexibility (in amount and timing - which can be important in managing taxable income), and tax is only due on the gains of the sale (which is less than 100%), while the entire dividend would be taxed (under the same circumstances).

And in general, concentrating on high-dividend paying stocks likely reduces your diversification.

edit/add - I didn't see the previous comments when I submitted - I'll just add, everyone is a "total return" investor. Total return is growth plus distributions, and that's the same for everyone. I find it confusing to say that anyone is a 'total return' investor, when we all are.

I find it more helpful and accurate to say that some here focus on high-dividend paying (or high-yield) investments. Same as some focus on tech, or precious metals, or real estate, etc.

I haven't seen anyone saying this, but I have seen "other people" that claim it is a fools errand. I say, let people decide what/how they want to invest assuming they have done their due diligence and that those "other people" aren't necessarily any smarter, just perhaps more risk averse, or have different goals, or have a different situation, or any other number of reasons for making the investment choices THEY make.

Flieger

 

[Flieger]

March thread (Finally) started!

Flieger

 

[L-5Player]

Some people here believe... Others recognize...

Careful - your bias is showing.

Results are all that really matter, and that doesn't translate to my stash being bigger than yours or vice versa. It's more nuanced than that.

 

[ERD50]

" ERD50 said: Some people here believe... Others recognize... "
Careful - your bias is showing.

Results are all that really matter, and that doesn't translate to my stash being bigger than yours or vice versa. It's more nuanced than that.

I was careful with my wording, as I know this is a can of worms. Where is the bias there? You chopped up my sentence which twists it. The full quote (again, carefully chosen), addressed two different things, 'special properties' (period), and forced sales.

Full quote: Some people here believe that high-dividend paying stocks/funds/ETFs have some 'special' properties that make them worth holding. Others recognize that dividends are essentially a 'forced sale',

And yes, there have been discussions on this forum where people argue that the stock price is not affected by the dividend payout, but we know the money is a transfer from the stock to the holder, and that lowers the stock price (not always easily seen in the market noise, but 100-2 = 98, no way around it). And some people believe high div payers are less volatile (all else being as equal as possible), but the evidence of that is weak.

 

[Flieger]

I was careful with my wording, as I know this is a can of worms. Where is the bias there? You chopped up my sentence which twists it. The full quote (again, carefully chosen), addressed two different things, 'special properties' (period), and forced sales.


And yes, there have been discussions on this forum where people argue that the stock price is not affected by the dividend payout, but we know the money is a transfer from the stock to the holder, and that lowers the stock price (not always easily seen in the market noise, but 100-2 = 98, no way around it). And some people believe high div payers are less volatile (all else being as equal as possible), but the evidence of that is weak.

I have never seen this, at least in the CEF and Income Investing threads.

Flieger

 

[COcheesehead]

And yes, there have been discussions on this forum where people argue that the stock price is not affected by the dividend payout,

This is true and I have been part of some those discussions where I try and educate, but to no avail.
I like the analogy of cutting a slice of bread off a loaf. In the end you still only have a loaf. You didn’t gain an extra slice.

 

[tulak]

I’ve given up trying to explain dividend payouts. Life is too short.

 

[L-5Player]

(Just a reminder that this is an income investing thread per the title)

It's amusing that folks feel they need to explain and educate others about how dividends work. Alas, to no avail. Because it's pointless! Those daft dividend investors are, inexplicably, beyond help!

/s

Sure, if you are addressing a 25 year old who is just starting this journey, teach them to focus on growth while accumulating. I would unquestionably do the same. And in fact during that period of my own life, I (mostly) did.

But if one is 59 like me, or 88 like my dad who has 4x my (already Chubby) NW and has been a diehard dividend investor his entire life... we simply have different lived, empirical experiences. We don't need to be educated. We are not objectively wrong. We also have decades of experience just like you, but we simply have another perspective.

 

[COcheesehead]

(Just a reminder that this is an income investing thread per the title)

It's amusing that folks feel they need to explain and educate others about how dividends work. Alas, to no avail. Because it's pointless! Those daft dividend investors are, inexplicably, beyond help!

/s

Sure, if you are addressing a 25 year old who is just starting this journey, teach them to focus on growth while accumulating. I would unquestionably do the same. And in fact during that period of my own life, I (mostly) did.

But if one is 59 like me, or 88 like my dad who has 4x my (already Chubby) NW and has been a diehard dividend investor his entire life... we simply have different lived, empirical experiences. We don't need to be educated. We are not objectively wrong. We also have decades of experience just like you, but we simply have another perspective.

I don’t think anyone was saying dividend investing didn’t provide value, but there have been posts buried deep I am sure on this forum where members argued that the dividend did not reduce the value of the asset on the ex date. That was my point about trying to educate folks on the process of an ex and a pay date. Some thought it acted like an interest payment.

 

[Flieger]

I don’t think anyone was saying dividend investing didn’t provide value, but there have been posts buried deep I am sure on this forum where members argued that the dividend did not reduce the value of the asset on the ex date. That was my point about trying to educate folks on the process of an ex and a pay date. Some thought it acted like an interest payment.

If that is true, they are wrong. I guess I just haven't seen it. I have seen some discuss that it drops on ex-div, then (most of the time) recovers at least some of the price. There are even charts tracking recovery periods. But to say that there is no impact to price on ex-div day would be silly.

Flieger

 

[L-5Player]

The only place where a dividend literally, and mathematically, reduces the share price is with a mutual fund. A reinvested mutual fund dividend does, unfortunately, result in simply having more shares of the fund at a lower price, for a net neutral impact on value.

With stocks and ETFs, it's more complicated. The exchanges and brokerages will mechanically lower the listed share price on the ex-dividend date. But that's just an artificial beginning.

Once trading starts, all bets are off. Market demand, world news, company/industry news, and what I call "price memory" take over and the results are totally unpredictable. At the end, it's impossible to tie that day's closing price, not to mention the price on subsequent days, to any permanent impact of the dividend. If it were a rigorous science experiment, it would not be possible to conclude any degree of causation.

And yet, that is exactly what anti-dividend folks claim to be the case. Hence the frustration some of us experience.

By "price memory" I'm referring to the collective awareness that investors who frequently watch and trade a particular asset maintain about its price range. They know its 52 week highs and lows, they know where it's been last week or last month, and they have their own personal entry and exit points. These factors cause the drop on ex-date to be quickly absorbed by other factors.

 

[thod]

I am impartial to whether the stocks I chose are a small or a large dividend payer.

At the same time, I do recognize that dividends do have a beneficial effect. Not to the stockholder directly, but to the management of the company. Management will know how important paying dividends are, more specifically, how important paying consistent, usually growing dividends are. Thus, I believe that will have a meaningful impact on strategic decisions. (Hopefully prevent them from doing foolish things.)

Excess cash generated by the corporation can be used for a variety of things. Such as grow the business, reward employees, ..., and reward the owners/stockholders.

Keep in mind that some businesses, might be in a position where their business cannot be reasonably grown, but still generates excess cash regularly. What are they supposed to do with it. Invest outside their business, reward executives, remodel the office, go to Vegas?

 

[COcheesehead]

The only place where a dividend literally, and mathematically, reduces the share price is with a mutual fund. A reinvested mutual fund dividend does, unfortunately, result in simply having more shares of the fund at a lower price, for a net neutral impact on value.

With stocks and ETFs, it's more complicated. The exchanges and brokerages will mechanically lower the listed share price on the ex-dividend date. But that's just an artificial beginning.

Once trading starts, all bets are off. Market demand, world news, company/industry news, and what I call "price memory" take over and the results are totally unpredictable. At the end, it's impossible to tie that day's closing price, not to mention the price on subsequent days, to any permanent impact of the dividend. If it were a rigorous science experiment, it would not be possible to conclude any degree of causation.

And yet, that is exactly what anti-dividend folks claim to be the case. Hence the frustration some of us experience.

By "price memory" I'm referring to the collective awareness that investors who frequently watch and trade a particular asset maintain about its price range. They know its 52 week highs and lows, they know where it's been last week or last month, and they have their own personal entry and exit points. These factors cause the drop on ex-date to be quickly absorbed by other factors.

The issue discussed in the older threads was way simpler. The poster argued the asset did not decrease by the value of the dividend at all on the ex date.

 

[COcheesehead]

FYI. There is a March thread.