do you ever tap your investments

[LivingAlmostLarge]

Do you guys ever tap your taxable investments? Or is it untouchable once it's gone into the brokerage account? I guess I struggle because once it's gone to our brokerage account I don't plan on using it. Money in our savings in our cash is what we can use.

[disneysteve]

Virtually never. Years ago, we cashed in some taxable mutual fund shares when we bought our house. We've also donated taxable holdings to charity a couple of times.

Other than that, no. Our investments aren't spending money. That's what our cash accounts are for.

[kork13]

Absolutely!

We use our taxable investments as our mid-term planning tool, most commonly a holding tank for buying real estate... think 3-10 years out. We build up our taxable brokerage, then when circumstances arise that we need those funds, we'll pull it. I wish I could easily upload the chart from my Vanguard account... It's quite apparent exactly when I've done that over the last ~10 years (4 times). Sep'12: Bought first home, pulled ~50% of my taxable investments out. Aug'16: Moved, bought 2nd home, pulled out 95% of investments. Oct'18: Paid off first house (now a rental), pulled out 75% of investments. Jun'20: Sold house #2 & bought #3 (current) in cash, pulled 95% of investments out. In each case, a healthy chunk of cash was also involved, which as a whole, mitigated the risks of our relatively shorter outlook than typically desired for stock investments.

The strong markets over that period has definitely helped that dynamic, because we always ended up profiting each time we sold our investments. But at the same time, that account has never made it above $100k. However, I do view that brokerage as one part of my taxable investments as a whole, which includes our real estate, so I've always more or less retained that money. Not necessarily the BEST plan, but it's been our plan, and continues to be -- once that account has enough to buy a house that looks good as a rental, we're planning to pull it out again for the purchase.

[ua_guy]

I emptied out a Davis Bacon pension/retirement thing because I had done some construction work that qualified for prevailing wage and requisite retirement contributions. It amounted to about $300 before taxes and penalties. The paperwork to roll it into an IRA was going to be a nightmare. Meanwhile DB was sucking down the account balance for admin fees. Terrible investment options, high fees, it's a total scam. So I did the right thing and cashed it out and bought myself a nice bottle of booze to drink while I thought about how much more I liked driving a dump truck than working in an office.

[srblanco7]

We have not touched any of our brokerage account investments in a couple decades. At present, we're not reinvesting the dividends and cap gains. Instead we're using these funds to rebuild a cash bucket.

[MonkeyMama]

We've never tapped any investments.

Probably the most likely reason that we would tap investments would be to pay for college or for a down payment on our next home. (Otherwise, is earmarked for retirement).

That said, any time I think we might use some of our longer term funds, we haven't needed to. Knock on wood. I doubt we will use any investments to fund my older son's college, for example.

[disneysteve]

Just to add some perspective, until the last few years, I didn’t have an employer sponsored retirement plan. Our taxable accounts were/are my retirement savings. Yes we have IRAs but the contribution limits are far too low to be meaningful if you earn a higher income. So we never touch them because to me it would be the same as sucking money out of a 401k.

[Fishindude77]

Sure, that's what we saved the money for .... to use.
Rolled the 401k into an IRA at retirement 3.5 years ago and have been drawing out of it monthly. Also cash and spend the dividend checks from a stock we hold, rather than reinvesting them.
Cashed in an old life insurance plan (roughly $60k) a couple years ago and used it for spending, had no need for it anymore.

[disneysteve]

Sure, that's what we saved the money for .... to use.
Rolled the 401k into an IRA at retirement 3.5 years ago and have been drawing out of it monthly. Also cash and spend the dividend checks from a stock we hold, rather than reinvesting them.

Of course. I don’t think LAL meant in retirement but rather before that. Yes we will definitely be tapping our taxable accounts when I retire, but not before then.

[Jluke]

Sold about 12k of berkshire in my taxable account for house project. It was the one with the least amount of gains.

Finally got rid of another individual stock in taxable (gain was 7500 or so I think) and moved that into vanguard VTI, VWELX and will put some towards 2022 Roth.

[Singuy]

Will probably never touch our investment as long as we have a job with income coming in. We spend like 35% of our income/year so it's more of a matter of what to invest in, not taking money out of investment.

[disneysteve]

Will probably never touch our investment as long as we have a job with income coming in.

Exactly. We are investing for retirement. My income is what we live on now, not our investments. Those are for later when I'm no longer working.

[Scallywag]

Do you guys ever tap your taxable investments? Or is it untouchable once it's gone into the brokerage account? I guess I struggle because once it's gone to our brokerage account I don't plan on using it. Money in our savings in our cash is what we can use.

What are you using / what do you plan to use the taxable investments for?

To answer your question - the little money in our taxable a/c is for funding a future down payment, so yes, if / when the time comes we will ABSOLUTELY be using it for it's intended purpose.

Had it been additional retirement savings (after maxing out traditional retirement a/cs) then no, we would have only touched it in retirement, not a day before.

[corn18]

We never touched our taxable retirement brokerage accounts when saving. Still haven't, but we will. Right now we are spending cash. Which I guess could be considered investments. Not sure why it matters, really. Unless you are managing a mental aspect of savings.

[disneysteve]

We never touched our taxable retirement brokerage accounts when saving. Still haven't, but we will. Right now we are spending cash.

How long will your current cash last and what, if anything, are you doing to replenish it? Have you done things like stopping reinvestment of dividends and capital gains for taxable accounts?