In Retirement - Live on Dividends or Sell Shares?

[bjl584]

This is a constant debate in the fire community, and there are arguments for and against it
Taxation, leaving a portfolio to your heirs, phycological peace, easy of planning, and money being fungible all come up in debate.
A lot of people do both.

Where do you stand?

[Tabs]

I am hardly the voice of expertise here, but just the same, I am firmly in the dividend camp. I believe you can generate up to $48k /yr single or $96k /yr married in capital gains, and still stay within 0% tax bracket. And that's before deductions. With deductions, that figure moves up to more like $63k /yr for me, or roughly translates down to a $5k /mo budget.

Assuming that one does not live a wild Vegas lifestyle (I don't), and that one is able to generate enough passive income, I don't see why not. In fact, the more investable asset one possesses, the more this strategy becomes viable while dialing down the risks more and more.

While I am not a zealot willing to die on this dividend hill, but so far, it's been working out for me these past few years. I am only doing what I think is the most practical, relative to my risk tolerance.....

Also, I realize I am being over-simplistic here, since it's also important to allocate portions of your portfolio to capture growth as well as, especially for us early retirees. So basically, I only have an certain amount set to generate the necessary passive income for monthly expenses, but after that, the rest goes into growth sectors.

[LivingAlmostLarge]

I'd sell shares because it's more cash efficient