You might say that I’m foolish and that one should “never touch capital.” Hold your assets tight and live off of the proceeds. As someone who no longer receives a regular paycheck, I can appreciate the concepts of passive income streams and cash flow.
Automatic withdrawals from mutual funds can take away the second-guessing and market timing that is bound to come with frequently logging in to sell shares to provide that retirement income stream.
The answer is a complex one, and it depends on a number of factors, including your retirement spending needs, other retirement income streams, time horizon, and tax implications.
There are a few tax considerations for early retirees and “normal” retirees later in life. 1. Capital Gains Taxes 2. The 0% Capital Gains Tax Bracket 3. Affordable Care Act Subsidies