Send dividends to settlement account?

[legalarglebargle]

I realized that some of my retirement accounts were not reinvesting dividends. Rather than automatically start reinvesting, I'm wondering if it wouldn't make sense as a bit of a bearish hedge to transfer them to the settlement fund now that interest rates have picked up? I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet. I know there are many trade offs in each person's individual situation, so I'm not looking for personalized advice so much as checking the validity/viability of the idea.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks

[sperry8]

I realized that some of my retirement accounts were not reinvesting dividends. Rather than automatically start reinvesting, I'm wondering if it wouldn't make sense as a bit of a bearish hedge to transfer them to the settlement fund now that interest rates have picked up? I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet. I know there are many trade offs in each person's individual situation, so I'm not looking for personalized advice so much as checking the validity/viability of the idea.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks

All of my Vanguard dividends transfer directly into my sweep account (and are not automatically reinvested). So Vanguards tech works if that is what you're asking

[ruralavalon]

Welcome to the forum .

Congratulations on your recent retirement.

I realized that some of my retirement accounts were not reinvesting dividends. Rather than automatically start reinvesting, I'm wondering if it wouldn't make sense as a bit of a bearish hedge to transfer them to the settlement fund now that interest rates have picked up? I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet. I know there are many trade offs in each person's individual situation, so I'm not looking for personalized advice so much as checking the validity/viability of the idea.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks

I suggest automatic reinvestment of distributions in all tax-advantaged accounts (both traditional and Roth).

In my opinion in a taxable brokerage account it's a good idea to direct distributions to a money market fund, to help defray retirement living expenses.

At Vanguard the website gives you a choice, either to automatically reinvest distributions or to send distributions to the settlement fund.

The settlement fund is Vanguard Federal Money Market Investor (VMFXX).

[soccerrules]

Welcome to the forum .

Congratulations on your recent retirement.

I suggest automatic reinvestment of distributions in all tax-advantaged accounts (both traditional and Roth).

In my opinion in a taxable brokerage account it's a good idea to direct distributions to a money market fund, to help defray retirement living expenses.

+1 what Ruralavalon said

[legalarglebargle]

I realized that some of my retirement accounts were not reinvesting dividends. Rather than automatically start reinvesting, I'm wondering if it wouldn't make sense as a bit of a bearish hedge to transfer them to the settlement fund now that interest rates have picked up? I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet. I know there are many trade offs in each person's individual situation, so I'm not looking for personalized advice so much as checking the validity/viability of the idea.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks

All of my Vanguard dividends transfer directly into my sweep account (and are not automatically reinvested). So Vanguards tech works if that is what you're asking

Thanks Sperry8, Do you know how to see the dividend received totals in the sweep account, and what if any interest has been paid? I appreciate your help...

[legalarglebargle]

Welcome to the forum .

Congratulations on your recent retirement.

I realized that some of my retirement accounts were not reinvesting dividends. Rather than automatically start reinvesting, I'm wondering if it wouldn't make sense as a bit of a bearish hedge to transfer them to the settlement fund now that interest rates have picked up? I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet. I know there are many trade offs in each person's individual situation, so I'm not looking for personalized advice so much as checking the validity/viability of the idea.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks

I suggest automatic reinvestment of distributions in all tax-advantaged accounts (both traditional and Roth).

In my opinion in a taxable brokerage account it's a good idea to direct distributions to a money market fund, to help defray retirement living expenses.

At Vanguard the website gives you a choice, either to automatically reinvest distributions or to send distributions to the settlement fund.

The settlement fund is Vanguard Federal Money Market Investor (VMFXX).

Thanks rural. It looks like a big place, and I'm glad I found it after scratching around the VG website. Most of my accounts do reinvest, makes sense. I'm just trying to think out loud on the tradeoffs since noticing that some accounts are not reinvesting (don't' know how that happened...)

[delamer]

If you are making withdrawals to cover expenses, then sending some dividends to the settlement account seems reasonable.

[sperry8]

I realized that some of my retirement accounts were not reinvesting dividends. Rather than automatically start reinvesting, I'm wondering if it wouldn't make sense as a bit of a bearish hedge to transfer them to the settlement fund now that interest rates have picked up? I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet. I know there are many trade offs in each person's individual situation, so I'm not looking for personalized advice so much as checking the validity/viability of the idea.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks

All of my Vanguard dividends transfer directly into my sweep account (and are not automatically reinvested). So Vanguards tech works if that is what you're asking

Thanks Sperry8, Do you know how to see the dividend received totals in the sweep account, and what if any interest has been paid? I appreciate your help...

You can see the dividends paid out in the statements area. It'll show a dividend paid and then a re-investment into the sweep account (so a credit and a debit in the same amount). Then, in the aggregate your Sweep account shows interest paid, monthly in your Statements/transactions area

[doobiedoo]

I realized that some of my retirement accounts were not reinvesting dividends. .. I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks Sperry8, Do you know how to see the dividend received totals in the sweep account, and what if any interest has been paid? I appreciate your help...

On your Vanguard account, select the "Holdings" tab at the top of the web page.
Then in the "Show" box, select "Distribution payouts" instead of the default "Summay information".

That will display the "Dividend and capital gains distributions" page.
You can view distributions by quarter vs year-to-date and by taxable vs non-taxable.

Your settlement fund should appear in the list. Note: The "Interest" column is always 0 for me. Instead the 'interest' paid on my settlement fund is still listed in the "Dividends" column. I believe this designation is for 1099 reporting, i.e. I will get a 1099-DIV for the settlement fund, not a 1099-INT.

That "Dividend and capital gains distributions" page has an option to "Change distribution elections" at the top right of the web page.
If you click on that, you will see whether dividends/cap gains are reinvested or not for each account holding. You can change it for each holding.

[Florida Orange]

A substantial amount of long term portfolio growth comes from reinvesting dividends. But there's a lot of fluctuation along the way and the stock market doesn't care about your personal financial situation. So for money you're going to spend soon I think it makes sense to send the dividends to your sweep account.

[rkhusky]

I have an automatic transfer set up between the settlement fund of my Vanguard taxable account to my bank. Dividends are directed to the settlement account. Once the taxable account is exhausted, I will start doing the same using my tIRA.

[pizzy]

We send dividends/capital gains in our taxable account to our settlement fund. We then purchase the underweight asset class when the amount reaches a certain number.

[legalarglebargle]

I realized that some of my retirement accounts were not reinvesting dividends. .. I am beginning to use the funds for income having recently retired (age 66), but am not making regular withdrawals yet.

As to the mechanics of the transfer, I can't tell from the website if all accumulated dividends would transfer, but I assume they would?

Thanks Sperry8, Do you know how to see the dividend received totals in the sweep account, and what if any interest has been paid? I appreciate your help...

On your Vanguard account, select the "Holdings" tab at the top of the web page.
Then in the "Show" box, select "Distribution payouts" instead of the default "Summay information".

That will display the "Dividend and capital gains distributions" page.
You can view distributions by quarter vs year-to-date and by taxable vs non-taxable.

Your settlement fund should appear in the list. Note: The "Interest" column is always 0 for me. Instead the 'interest' paid on my settlement fund is still listed in the "Dividends" column. I believe this designation is for 1099 reporting, i.e. I will get a 1099-DIV for the settlement fund, not a 1099-INT.

That "Dividend and capital gains distributions" page has an option to "Change distribution elections" at the top right of the web page.
If you click on that, you will see whether dividends/cap gains are reinvested or not for each account holding. You can change it for each holding.

Got it, thanks!

[rob]

I'm a little surprise at how many reinvest in taxable if not drawing on portfolio... I never do it in taxable due to creating so many tax lots. I reinvest the div's as needed at the time to rebalance. Tax sheltered - I always reinvest and just sell when rebalancing since it does not matter.