As to your question about my main taxable portfolio, called the Bridge 7+, I have a significant issue that I've mentioned a few times now as it relates to weight. One of the mismanagement issues I had over the years, if you can call it that, from my working years was allowing some of the positions to get too large and not trimming at a time when I may have been able to manage taxation a bit better, but that's arguable. Managing to a 15% capital gains tax is relatively easy BUT with early retirement, you also need to manage the income brackets as it relates to any medical subsidies or IRMA as even if you limit taxes to 15% from the sale of stock, it still boosts income which may impact/negate subsidies or reduced Medicare cost. Thankfully, I'm still years away from any Medicaid impact and the impact is small enough that I'm not going to include that as a huge determinant.
But in my taxable, account I have a HUGE three-headed hydra of AAPL, MSFT and GOOGL which make up 35% of the 7+ account itself and about 21.5% of my taxable accounts in total. If there's a silver lining, it's in the fact that these three issues, while outsized, can be hold for a long period of time as I have no expectation that I'd have to liquidate them within the next 10-15 years unless something unexpected occurs, which could happen. But in the meantime, I have a plan for slow reduction over the next decade.
I'm about tapped out for any tax loss harvesting potential though I will still do it annually, usually at the end of the year when I know what my income scenario is looking like. Fortunately, or unfortunately, depending on how you look at it, dividends can actually be a big issue. I could actually make a case for having the taxable account managed to low/no dividends and, instead, prioritize them in the IRAs, but it's judgment call. In the end, I use the dividends to fund our early-retired life and that provides a level of safety and anxiety freedom that is worth the taxation they bring. But with the 0% capital gains bracket at $94,000, one could make an argument for going with no income, including dividends, and then using the 0% cap gains bracket to unwind from appreciated securities.
One thing that really bugs me about our tax system as it relates to a CD/Fixed Income ladder is that CD income is not given "qualified" dividend status and is treated as ordinary income. I get it, but I wish dividends weren't treated as income in that regard. |
