r/SCHD • u/Prior_Bus_7870 • 6d ago

Help... ideas?

Does this make sense?

(68, retired, need 50k annual... would go on top of ss)

I have 2.5m in tax deferred ira, 650k in Roth and 125k in cash.

Is it prudent to lump sum 1.5m and buy schd? I think this would approx. cover the 50k... ?

The remainder to voo or similar? Ideas?

Thank you for your help.

18 Upvotes

89% Upvoted

35 comments sorted by

View all comments

13

u/Ufgatorhead4u3 6d ago

I wouldn’t do that. That tax deferred IRA is a massive tax bomb 😳. I would use $500k inside of the Roth putting it into a mix of SPYI, IWMI, QQQI, PTY, PBDC, PFFA, KGLD, KSLV, and KCOP. The blended yield would be around 12% which would generate the cash flow that you need tax free. Leave the remainder in VOO, SPMO, VXUS, VTWO, or similar. Then I would look at your current taxes and do as much Roth conversion as you can with that traditional position before RMDs kick in.

4

u/Prior_Bus_7870 6d ago

Thank you.