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Thanks for the link Ted. I personal reinvest in both tax & tax free accounts, but was wondering if it would be more efficient to wait till nav. drops in the summer months,usually? Anyone care to comment?
I don't automatically reinvest dividends form my stock, bond and mutual fund holdings.
In my taxable account, I often use this as spiff money to my pocket; and, in my IRA account I pool the money until I have enough to buy a meaningful position in a trageted fund. By doing this I feel it has reduced the hassells of tracking cost basis in my taxable account and it has also been an aid to me in better positioning money in my retirement account. I do not like to buy at the market top as I feel it better to buy during market pull backs. So, by pooling the money I feel I can better direct it.
Once you are in retirement, taking the RMD, and no earned income, do you take or reinvest? Seems that if you are using the RMD, you have a decision of earning enough dividends and interest to cover the cash needed for RMD or having to sell shares. Does it still make sense to reinvest dividends? Or better to take the dividends and invest it in a cash account? Reinvesting makes it vulnerable to a market meltdown and having to sell shares at the worst time. Your thoughts?
I saw your question ... and, I was not sure if you was asking this of the board or of me.
Currently, I am not taking distributions form my IRA; however, I know of some that are. Some have their securities set to reinvest and some have their securities set to pay all income to a cash pool inside the IRA form which they take their distributions.
From my thoughts, it would depend on the type of securities held within the IRA itself as to which would be the best way to go. I am leaning towards setting everything up to pay to a cash pool and take distributions form it. However, I have a few years to go before I start to tap my IRA for distributions.
I agree, that if you don't use the cash pool method then you could at times have to sell shares when they are depressed. However, you could sell shares towards a market peak each year for the distribution. A friend of mine did just this as she said she was selling enough for her annual distribution during the first quarter while share prices were high.
I guess, the answer is pehaps a mixed bag as there is probally no one correct way, or wrong way, to do this. Since I have my taxable account set to pay to cash, I'll probally set my IRA to do the same once I roll my 401k into it.
Ron, I am not sure I helped you with an answer as I guess it boils down to one's own preference.
Skeeter, thank you. I was just entering the discussion picking the great minds here. I do a little of both, reinvesting and collecting cash. I have enough accumulated in cash for a couple years RMD but as I get up in age and down in health time to rethink. thanks you for your answer. Ron
I'm in retirement and reinvest dividends on all mutual funds in my retirement accounts. I take cash dividends on ETFs and individual stocks. I'm years away from having to do RMD on my main portfolio. However, I do have an inherited IRA where I do have to do RMD, but I keep enough cash in that account to more than cover it. I have a taxable account with a mutual fund in it that also reinvests; in this case I'm not concerned about calculated the cost basis since it's now the responsible of the brokerage to do that, and Fidelity's site does a nice job of that.
Comments
Thanks, Derf
I don't automatically reinvest dividends form my stock, bond and mutual fund holdings.
In my taxable account, I often use this as spiff money to my pocket; and, in my IRA account I pool the money until I have enough to buy a meaningful position in a trageted fund. By doing this I feel it has reduced the hassells of tracking cost basis in my taxable account and it has also been an aid to me in better positioning money in my retirement account. I do not like to buy at the market top as I feel it better to buy during market pull backs. So, by pooling the money I feel I can better direct it.
Good Investing,
Skeeter
I saw your question ... and, I was not sure if you was asking this of the board or of me.
Currently, I am not taking distributions form my IRA; however, I know of some that are. Some have their securities set to reinvest and some have their securities set to pay all income to a cash pool inside the IRA form which they take their distributions.
From my thoughts, it would depend on the type of securities held within the IRA itself as to which would be the best way to go. I am leaning towards setting everything up to pay to a cash pool and take distributions form it. However, I have a few years to go before I start to tap my IRA for distributions.
I agree, that if you don't use the cash pool method then you could at times have to sell shares when they are depressed. However, you could sell shares towards a market peak each year for the distribution. A friend of mine did just this as she said she was selling enough for her annual distribution during the first quarter while share prices were high.
I guess, the answer is pehaps a mixed bag as there is probally no one correct way, or wrong way, to do this. Since I have my taxable account set to pay to cash, I'll probally set my IRA to do the same once I roll my 401k into it.
Ron, I am not sure I helped you with an answer as I guess it boils down to one's own preference.
Have a good day ... and, Good Investing,
Skeeter
Ron