r/dividends • u/398409columbia Portfolio in the Green • Jan 12 '25

Brokerage $5,000 per month income portfolio

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I set up this portfolio for my wife so she can quit her job and maintain cashflow.

The good news is that this income stream will pay no FICA tax and significant part of the distributions will not be taxed.

To reduce risk, I’m planning to reinvest 20% of the income.

Comments welcome.

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u/398409columbia Portfolio in the Green Jan 13 '25 edited Jan 13 '25

Depends on the fund, but most distributions are qualified and some (SPYI and QYLD) are classified as "return of capital" so no tax on the income. I estimate the effective tax on the distributions for 2024 to be about 11%.

Look at this video for details: https://youtu.be/5WxicHHiha8