There are many things to consider with this situation, such as:
- your other sources of income (social security, required minimum distributions, pensions, etc)
- your need for the funds
- charitable intent (were you already going to give money to charity anyway?)
- your estate plans
If the distributions are causing your tax bracket to jump up, from say 12% to 22%, then you may want to consider selling. But if the distributions are not causing a tax rate increase, then it may not be as lucrative from a tax standpoint to sell, especially if you don't really need the money from the sale. You also would want to pay attention to long-term capital gains tax brackets every year. It wouldn't be wise to pay 20% in capital gains taxes in one year if you could spread the sales out and pay 0% or 15% on the same amount of money.
You may also want to consider holding onto the investments and gifting them in your estate. The beneficiaries would receive a step up in basis, which would lessen or eliminate capital gains if they sold upon receipt.
You mentioned charity. If you already have the intent to give to charity, you could do so via a donor-advised-fund and avoid paying any capital gains taxes.
These are just some things to consider. You definitely have options, and you don't have to do the same thing every year. It sounds like you are approaching the decision with the right mindset. There is no one best answer; it all depends on what your goals are. I hope this helps! Great job on making such valuable investments!
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
