Do you turn off reinvesting gains when reaching FIRE?

[Fru-Gal]

Are there tax advantages to sending your gains to a separate cash account to live off of instead of selling stock? Should I turn off reinvestment once I begin the withdrawal phase?

[ixtap]

What are your expected tax brackets? Do you have spec ID?

[nalor511]

I turn them off, and when I want to invest (dip, or Renaissance, etc) then I do it manually

[terran]

You'll pay tax on your dividends whether you reinvest them or not, so yes I would say turning off reinvestment and spending that money first makes sense. That way you'll avoid extra tax lots that will be short term gains for the first year.

[Mr. Green]

You'll pay tax on your dividends whether you reinvest them or not, so yes I would say turning off reinvestment and spending that money first makes sense. That way you'll avoid extra tax lots that will be short term gains for the first year.

+1. We take our dividends now that we're drawing on our stash. Unless you have a bunch of money sitting in online savings accounts it's the lowest hanging fruit when figuring out where to draw your money from.

[seattlecyclone]

I still automatically reinvest dividends in the retirement accounts, but seems silly to do that in the taxable accounts if you're going to just turn around and sell some shares within a couple weeks anyway.

[Fru-Gal]

Great, thx. Yes, this was referring to my taxable accounts as I'm hoping we still have 4-5 years before needing to touch IRA and 401k.

[Rdy2Fire]

Turned mine off a couple years ago and have invested in manually but, as of October will let the reserve build and start withdrawing it as needed. Since I have already exceeded my number and am paying tax on those dividends it just makes sense, for me, to keep that $$ in cash and take it out if/when I need it