My job has ended due to a restructuring, and I realistically am looking at a 6-9 month "semi-FIRE" period at least. We are at 30-33x expenses with flexibility to reduce expenses if needed, so my "semi-FIRE" period could turn into full blown FIRE if I don't find a job worth doing. DW does not work. We are both 50 with two elementary age children.
Question for the board: Historically we have reinvested dividends in both taxable and tax-advantaged accounts. What is the typical approach to dividends during FIRE? If I continue re-investing from my taxable accounts, I will likely need to keep more cash on hand to cover expenses. If I instead sweep dividends from my taxable accounts to banking it will cover approx 25% of monthly expenses. Note I am not planning to change my investment mix to generate more dividends - this is just a question about what to do with dividends I am already receiving based on my established investment mix (65/35).
I am leaning towards using those dividends for monthly expenses to reduce potential variance but the accumulation phase side of my brain is having a hard time accepting that approach.
Question for the board: Historically we have reinvested dividends in both taxable and tax-advantaged accounts. What is the typical approach to dividends during FIRE? If I continue re-investing from my taxable accounts, I will likely need to keep more cash on hand to cover expenses. If I instead sweep dividends from my taxable accounts to banking it will cover approx 25% of monthly expenses. Note I am not planning to change my investment mix to generate more dividends - this is just a question about what to do with dividends I am already receiving based on my established investment mix (65/35).
I am leaning towards using those dividends for monthly expenses to reduce potential variance but the accumulation phase side of my brain is having a hard time accepting that approach.
Statistics: Posted by 2commaBH — Wed Jun 05, 2024 3:40 pm — Replies 2 — Views 211