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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75890  
Subject: Re: Wade Pfau: 3% is the new 4% SWR? Date: 3/4/2014 2:54 PM
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You've got to have them first. No capital gain, no income?


You can sell stocks that have dropped as well as those that have risen. What you need in this instance is cash, and you don't have to have a gain to get cash by selling a stock.

And then there's the question of WHEN to sell to realize the capital gains.

Why is timing an issue? You can choose when to sell, and by doing so, control your tax hit a bit better. And if your gains are long-term, they have a lower tax rate than dividends which are taxed as ordinary income.

I'm wondering if people are focused on generating the total income necessary from their portfolio only through dividends because the preference is to have something left at the end for heirs. Perhaps that is why this isn't making sense to me. DH and I do not care if we leave anything for the kids when we die, and so we definitely plan on spending from our portfolio in terms of both the income and the principal, but there will be enough principal to sustain us so it is not a problem to tap it during our lifetime.

And yes, I have taken into account that there will be down years as well as up years.
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