Thanks everybody, a lot of food for thought. Since it's almost tax time, I'm going to have a long talk with my accountant.
A little bit more info as requested. I think I'm retired, but I could continue to work if I invested a substantial amount in upgrading my studio, which may end up as a break even proposition.
I have about 26 individual stocks and about 13 funds. I now have all my interest and dividends deposited in a cash account and can live off them. I have no other source of income, except some royalties from tv shows (minor), which will eventually dry up and some EE bonds which will reach final maturity from 2016 to 2027 - also fairly minor - starting at $5000 to about $15000 per year. I plan on starting SS at 70.
I started out with DRIP's in the '60's and was taught (by my thrifty mother) to diversify in the sectors of the S&P 500. I developed an acronym for the sectors M-U-S-I-C - T-H-E-F-T (an unfortunate acronym for someone who worked in the music biz) and once I got one of each, I started over trying to diversify within each sector and added a REIT along the way. Most of my funds are muni or gov bonds, with a small portion of various funds in an IRA. 90% is in taxable. For some random reason, this has worked out well. I've rarely speculated and was never intrigued by the flavor of the decade. In retrospect, I think Mr. Bogle would have really liked my mom and the way she taught me, way back before index funds existed.
Last year I cashed a portion of my drip's in (FIFO), but tried to keep the amounts low to avoid too much tax, but when I transferred my full service account to my discount account, I learned that two large muni funds would not transfer, forcing them to be liquidated. This gave me unexpected capital gains, but I have no idea of the actual tax consequences. Again, I must talk to my CPA.
Being single and with all my family in better shape than I am, I simply have a TOD to my only sibling to avoid probate. I'm interested, eventually, in a SPIA or some sort of long term care policy, but really feel too young (61) at this time.
My main fear is the cost of end of life health care. With no kids, I'm going to most likely be at the mercy of live in assistance or nursing home care givers. Scary!
I think the best thing to do, is to move gradually into indexing, over several years as grabiner suggests. This will require some additional planning and the discipline to avoid analysis paralysis, but I can't see liquidating everything all at once. The switch to index funds will probably be funded from stock sales, not from other funds, for the most part.
I hope I answered all the questions, and thanks again for all the advice.
"The stock market is a giant distraction from the business of investing." - Jack Bogle