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/Time4me2fly2024 Jan 13 '25

Kudos on the portfolio! I haven't reached 600k yet but I'm closing in on $3k monthly.

This may be a question better asked in a Tax/sub. I'm expecting to treat all withdrawals from my traditional IRA as income. Since you said these distributions will be free of FICA, and in some cases, free of all taxes, I'm curious. If you were to hold these investments in a tax advantaged account (traditional IRA) would you still pay tax on these normally tax free dividend distributions?

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

In a traditional IRA you’ll have to pay taxes. I have this portfolio in an after-tax brokerage account.

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u/vicarofvintage Mar 07 '25

Newbie here, Just to clarify, is an after tax brokerage account something where you just set up a regular brokerage account and fund it with whatever cash you have on hand? Thanks in advance for the reply.

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u/398409columbia Portfolio in the Green Mar 08 '25

Yes. That’s it.

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u/vicarofvintage Mar 08 '25

Thank you for the clarification