I don't think it is a separate discussion. You said:Admiral wrote: ↑Wed May 25, 2022 10:20 amReal vs. nominal is a separate discussion. There's no assurance stock dividends will pay out steadily in real terms either (see: 2022). And they are uncontrollable taxable events whether one needs the money or not.TN_Boy wrote: ↑Wed May 25, 2022 9:32 amUnless the bonds are TIPS, the income is steady in nominal terms, not real terms. The last 18 months have provided a clear demonstration of that fact.Admiral wrote: ↑Wed May 25, 2022 7:39 amNot sure I would characterize this plan as "a no-brainer income stream" since companies can and do cut their dividends for various reasons. If you want steady income without selling stock, buy bonds or CDs.Leesbro63 wrote: ↑Wed May 25, 2022 7:22 amBehaviorally I like this. A no-brainer income stream. But as a few others mentioned, you could live into your 90s and end up with a huge taxable income for many years that doesn’t need to be. I’ve read about people who use BRK (Warren Buffet’s Berkshire Hathaway) as their stock index fund. They sell a little each year, as needed for spending. Get the same capital gains tax rate as dividends. But they have control over their taxable income.carminered2019 wrote: ↑Wed May 25, 2022 12:29 am I am trying to build a stock portfolio where dividends pay for all my living expenses by age 60.
and I am pointing out that unless you buy inflation-indexed bonds, you may not get steady income from your fixed income interest. That is relevant.if you want steady income without selling stock, buy bonds or CDs
And yes, a dividend stream from equity may or may not keep up with inflation either, and will definitely be variable.
If you want a steady income in real dollars (which is what I want) your income stream has to be inflation-indexed.
Or, if you have a mixture of stocks and bonds and you want a constant real dollar income, you take interest and dividends and if necessary sell shares to keep the income steady in real terms. Which is what I would do.
I don't see what the taxation of dividends has to do with with discussion. Even a very tax efficient total market index fund pays out dividends upon which tax will be due in a taxable account. When pulling from tax-deferred accounts, everything is taxable as ordinary income, etc. so dividend taxation is not an issue.