linuxuser wrote:House Blend,
I am not retired yet but strongly considering it.
I don't need the distributions now but will when I early retire.
So, it sounds like I should stop reinvesting and send the dividends to my checking account?
I don't think there's only one right answer. But as noted, sending dividends to a MMF or bank account gives an accumulator more chances to rebalance with no added costs. And creates fewer wash sale obstacles.
For a retiree, dividends are taxed regardless of what you do with them. So you might as well spend that money first before tapping tax-advantaged accounts or selling taxable shares. So it also makes sense for retirees to direct dividends to a bank account.
(In tax-advantaged accounts I would reinvest.)