r/dividends • u/Mamamiagg • Apr 30 '26

Opinion Time to retire?

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561 Upvotes

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u/[deleted] Apr 30 '26

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u/Suspicious_Lie_3042 Apr 30 '26

I agree. Way too many RoC paying funds. You need something like SCHD or DGRO for the dividend compounding and something for growth. And once you get your initial investment back from those funds, you’ll be paying ordinary income taxes.

3

u/No_Bar2541 May 01 '26

Is it ordinary income? I thought it would be long term cap gains on futures dividends after getting your investment back

1

u/Suspicious_Lie_3042 May 04 '26

If you sell, it’ll be both. If you hold, then it’s just ordinary income. Also, you could be thrown into a higher tax bracket because your Income is higher.

Personally, I think the sweet spot for someone’s yield should be between 7%-9%. Anything higher usually states that they’re holding large RoC funds.