I've spoken with 2-3 that were in the 2-3% SWR and they simply turned dividends to payable rather than reinvested and that covers their expenses in the first year of retirement alone to get the retirement ball rolling (all of them retired into a rising market for the first 12-24 months at least). It's mental accounting for sure, but "getting paid" quarterly seems to alleviate the "weird not having a pay check" mind warp many face in decumulation.
All of them retired before SS and one is on it now and it's just gravy so he turned re-invest back on for his Intl ETF in most of the accounts where it is held. I think even if you're in the 3-5% WR having dividends payable helps to alleviate the psychological burden. I think having a >15% sequence right off the bat in retirement is a much bigger factor to psychology especially if you're at 4-5% WR.
This is the one benefit (to me personally) where having mutual funds over ETF's works out as you can schedule recurring sales to emulate a "paycheck ' while also DCA'ing if you will
All of them retired before SS and one is on it now and it's just gravy so he turned re-invest back on for his Intl ETF in most of the accounts where it is held. I think even if you're in the 3-5% WR having dividends payable helps to alleviate the psychological burden. I think having a >15% sequence right off the bat in retirement is a much bigger factor to psychology especially if you're at 4-5% WR.
This is the one benefit (to me personally) where having mutual funds over ETF's works out as you can schedule recurring sales to emulate a "paycheck ' while also DCA'ing if you will
Statistics: Posted by deltaneutral83 — Tue Jan 23, 2024 7:56 am — Replies 16 — Views 1133