No. of Recommendations: 5
My main question here is this ... It seems since all this money will be taxable when I make my 4% SWR withdrawals, there is no tax advantage of any one income investment strategy over another in this situation. I am trying to decide between going with option A (1 year cash reserves, 5 year bond ladder, and the remaining 50% invested in growth stocks) versus option B (all money invested in traditional, bell weather dividend paying stocks to achieve a 4+% withdrawal rate from dividend income only).

I think you need to do some more reading on what the concept of the SWR is based on. Hint: It's based on an ~60/40 mix of stocks to bonds, and does not account for using cash reserves and/or bond ladders for withdrawals, nor does it in any way suggest that you should count completely on dividends to fund the withdrawals. Each year, the portfolio should be rebalanced to the same 60/40 mix.

Additionally, at age 61, you probably need to be counting on a longer timeframe than 30 years, so you may want to adjust your initial withdrawal rate down to say, 3.5% instead of 4%

AJ
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