Posted: 7/10/2026 6:15:21 PM EDT
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I retired two years ago at 55 with a portfolio evenly split between IRA and brokerage. In my brokerage account, I have dividends set to reinvest, which made sense during the accumulation stage. Now that I'm selling shares (all index funds, VTI and BND or Fidelity equivalents), would it make sense to turn off DRIP and harvest the dividends for grocery money, thus selling fewer shares to generate the same amount of cash for living expenses? I appreciate your thoughts and experiences. |
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Assuming you are withdrawing more than the dividends are generating in a taxable brokerage account, I would not auto reinvest dividends to avoid any possible wash sale issues. I would also make sure that you are selling long term positions first, so that you pay long-term capital gains rather than short-term capital gains. |
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Originally Posted By Morgan321: Assuming you are withdrawing more than the dividends are generating in a taxable brokerage account, I would not auto reinvest dividends to avoid any possible wash sale issues. I would also make sure that you are selling long term positions first, so that you pay long-term capital gains rather than short-term capital gains. Thanks! I stopped investing before retirement except for a Roth IRA so everything in my brokerage is long term capital gains. |
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Originally Posted By HuskerTanker: Thanks! I stopped investing before retirement except for a Roth IRA so everything in my brokerage is long term capital gains. If you’re in the 15% long term bracket that minimizes your taxes now and leaves the most profitable positions for your heirs who will get a basis step up. |
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I have a mixed bag going on, been retired for 4 years. I take dividends from my IRA. I have them deposited directly in my checking every quarter. For my brokerage acc, I let dividends accumulate and compound with the exception of capital gains. I have some mutual funds in my brokerage that pay capital gains at the end of the year. I have those deposited directly into checking. it's usually a large chunk of money that I have to pay taxes on anyway, so I take it and use it during the year. for individual stocks, I have never taken a dividend, all are reinvested. |