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structure wise if i had to do it all over again , those dividend paying funds would all be in my retirement account .
they would just get reinvested and keep growing for decades until needed down the road to refill spending buffers . ..
dividends get cut , suspended and vary ...they are not a good source as far as setting up an income stream that is safe , secure and consistent directly .
as well as each payment is a reduction from the dollars left compounding for you for the future .
so my first choice would be arrainging things so they are in retirement accounts and reinvested as those equities are the work horse . if in the taxable account they work better being buffered , collected and then when it is time to be spent you know exactly what you have to work with .
if you are trying to live hand to mouth with them , well as 2008 showed you can get caught short budget wise if they are cut or suspended then you have to figure out how and from where to fill the gap . our dividends and fund distributions range from 69k to 29k a year so it can be difficult trying to pensionize an income flow off such a wide spread
personally i want those dividends reinvested otherwise you are reducing the dollars left compounding for you with each payment you get . but i don't want to pay tax on them and then need to pay tax again on other money i raise to live on from a taxable account . so retirement accounts are best for this .
there are lots of ways to structure a draw but each is unique to only you .
we entered retirement with 1 years cash ready to go .... then we let the dividends grow in the retirement accounts by reinvesting , and the taxable account dividends were accumulated for the next years budget , since the present year already is funded with cash instruments. we also apply interest from the taxable account bond funds as well , to next years budget .
that way as the year progressed we could see what we needed to do to refill for next year . so the taxable dividends and distributions were always refilling next years money and being buffered and there were no surprises as to what we had to work with and fill the gap on .
Last edited by mathjak107; 12-30-2019 at 01:55 AM..
structure wise if i had to do it all over again , those dividend paying funds would all be in my retirement account .
they would just get reinvested and keep growing for decades until needed down the road to refill spending buffers . ..
dividends get cut , suspended and vary ...they are not a good source as far as setting up an income stream that is safe , secure and consistent directly .
as well as each payment is a reduction from the dollars left compounding for you for the future .
so my first choice would be arrainging things so they are in retirement accounts and reinvested as those equities are the work horse . if in the taxable account they work better being buffered , collected and then when it is time to be spent you know exactly what you have to work with .
if you are trying to live hand to mouth with them , well as 2008 showed you can get caught short budget wise if they are cut or suspended then you have to figure out how and from where to fill the gap . our dividends and fund distributions range from 69k to 29k a year so it can be difficult trying to pensionize an income flow off such a wide spread
personally i want those dividends reinvested otherwise you are reducing the dollars left compounding for you with each payment you get . but i don't want to pay tax on them and then need to pay tax again on other money i raise to live on from a taxable account . so retirement accounts are best for this .
there are lots of ways to structure a draw but each is unique to only you .
we entered retirement with 1 years cash ready to go .... then we let the dividends grow in the retirement accounts by reinvesting , and the taxable account dividends were accumulated for the next years budget , since the present year already is funded with cash instruments. we also apply interest from the taxable account bond funds as well , to next years budget .
that way as the year progressed we could see what we needed to do to refill for next year . so the taxable dividends and distributions were always refilling next years money and being buffered and there were no surprises as to what we had to work with and fill the gap on .
I lost an aca subsidy because I planned badly with them . I couldn’t get all the funds in the retirement money so I got whacked
Yep. Lots of people didn’t see that curveball coming. You just never know how our politicians are going to screw up our planning. I’m going to delay SS to 65 for the same reason, unless another healthcare system is introduced.
Yes, for 5 years now. I have a modest lifestyle and low rent. Don't dine out much. I use my S.S and 2 pensions from work plus dividends from stocks. It can be done with enough money of course. I live alone so it is easier. But if I move to another area where housing is double then it becomes iffy and unviable over the long run.
I was thinking more of how you structure your dividend payments. I have 2 DRIPS, I can send dividends to my checking. I believe at Vanguard you can have your dividends sent to a Vanguard money market and then set up a reoccurring withdrawal from that to checking. You can do the same with Fidelity. My Pension has a tax deferred account (like a 401k) that I fund. I figure I can do the same with that, just set up a reoccurring withdrawal from that which equals the interest. So in theory, I would get social security and pension, and then interest and dividends which make their way back to my checking either directly or in a round about way from money market to checking. In effect, my savings would stay the same and I would just spend the interest. Yes, inflation would eat at it, but the strategy would last forever unless I needed to pull a big amount of cash from an account. I think that would work - but I can't try it until I retire in a year and a half (that's my time table).
Agree. I have all of my investment income automatically sent to my checking account at the end of each month. I then move the excess to a saving account and in the months income is down move money from the sayings account to the checking account. I also do this for annual and quarterly bills.
I took the thread title question..."Does anybody live off interest and dividends?" to mean, is your interest and dividends enough to live off of?
If that was the question, my answer can only be "I wish"
in my opinion the space in a tax advantaged retirement accounts is far to valuable for growth investments , to take up valuable space with non growth investments ..
so taking some retirement money which may already be in growth investments and buying a qlac with it , to me makes no sense .
especially because a deferred annuity outside the retirement plan is already tax deferred. so sticking an already tax deferred product in a tax deferred account , is accomplishing what ?
giving up growth investments that grow tax referred for a point or so more in interest can be self defeating .
the main advantage to the qlac is the ability to defer rmds but that is also the biggest disadvantage because it goes on an accelerated rmd schedule .
so in the end , much ado about nuttin .
my choice is leave the growth investments in an ira alone , add an spia when the time comes and you will likely be farther ahead
I get your point. I agree. Thanks as always! Jeez, I appreciate the input on this forum!!
I sold my trucking business 7 years ago. The buyers were young men, the sons of my former employees, so they knew the business well. But like most young people, they didn't have much cash. The bank and I stepped in to help.
I came away from the deal as the largest stockholder in the closely-held corporation. I remain an "employee" for life. I derive an income stream for life, and free private medical and life insurance for life. In return, I agreed to provide any consulting needed.
The 3 young men are doing fine. The company supports them and their families well, and it has expanded. Owning a business is one of the best ways to provide well for yourself in retirement.
You are to be congratulated, and you are completely right.
Personally, I couldn't do it, though - all the more reason you are to be congratulated!
I am so darn wiped out from years of family drama and personnel drama that when I walk out the door,
all I want out of life is to sit on my porch in a rocking chair, read, listen to the dawg snore, take a swig out of my jug every so often, listen to the (imaginary) mule munch on the corn he's snuck into, listen to the still bubble, and take potshots at anybody coming up my driveway with my trusty 20 gauge.
**This is a thought experiment, mind you. I am a buttoned down corporate type, not a drunken, homicidal maniac. And I am a p*ss-poor shot. Although I AM partial to snoring dawgs and reading.**
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