Living off dividends = to 0% WR?

[target2019]

Those of you who are already retired: do you reinvest your dividends, or spend them?

I'll skip the other points and answer one question you have.

I'm retired, age 70, married.

In taxable account I do not reinvest, except for money market. The dividends pay most of our Real Estate tax bill.

In tax-deferred and tax-free accounts we do re-invest all dividends. I may or may not continue down that path when RMDs must be taken from tax-deferred.

So my answer is, it depends on other factors unique to each individual or couple.

 

[Flyfish1]

We reinvest 25% of dividends and draw the rest as income.

 

[scrabbler1]

Not being old enough to collect SS or my frozen company pension, I have been living off my bond funds dividends for the last 15 years. No, I do not consider that giving me a 0% WR. I calculate my WR as my expenses divided by my total portfolio, including a tIRA I have just become eligible to withdraw from (I just turned 60) but have no need to.

About 2/3 of my non-IRA dividends come from a single (big) bond fund, and this subset is barely enough to pay my expenses. Therefore, I can reinvest the rest of these dividends. It wasn't always this way; for a few years, I also took as cash the dividends from a stock fund. And, a few times I took a very large CG distribution as cash so I could pay the income taxes on it, then reinvest the rest of it.

 

[Perryinva]

I believe you can only add to an HSA if you have earned income. Same as contributing to a Roth.

 

[Out-to-Lunch]

I believe you can only add to an HSA if you have earned income. Same as contributing to a Roth.

I do not believe this is correct. Publication 969 says

Any eligible individual can contribute to an HSA. For an employee’s HSA, the employee, the employee’s employer, or both may contribute to the employee’s HSA in the same year. For an HSA established by a self-employed (or unemployed) individual, the individual can contribute. Family members or any other person may also make contributions on behalf of an eligible individual. (Emphasis added.)

Nowhere in that publication is earned income mentioned (except in relation to Archer accounts).

 

[pb4uski]

^^^ Agreed. You don't need to have earned income to contiribute to a HSA, you just need to have a HSA eligible health insurance plan.

 

[audreyh1]

I believe you can only add to an HSA if you have earned income. Same as contributing to a Roth.

Nope doesn’t require any income earned or otherwise. It does require a current HSA eligible health insurance plan.