I don't have a problem with dividends per se in a taxable account, but I do question the choice of GSHAX. This fund is kind of a dog IMHO. Pretax it is only returning 5-6% a year. Taxes are going to be around 15-20% (not 5%), when you include federal (15%) and state and local (5%), so after tax return is only 4-5%.
Also, most of OP's current situation (excluding individual stocks in brokerage) suggests conservative risk tolerance (15 yr mortgage, dividend paying mutual funds, 147K in a money market), so based on that I would think paying off the house and investing aggressively for retirement and moderately for medium term (education, cars, etc) would be the best plan. If OP disagrees with the conservative risk tolerance then Jim's #1 or #2 might be more appropriate.
EDIT: I was wrong about the capital gains rate, it is 5% in current tax bracket. I still think a different fund would be a better choice if dividends are needed for income.
|