The Truth About Municipal Bonds
May, 25 2022; Duration: 11:37
Today’s podcast explains why it might be a massive mistake to invest in municipal bonds. The reason why this is such an important topic is our unusual fixation with municipal bonds when trying to set up a tax-free retirement. Interest from municipal bonds counts as provisional income. That means that it counts against the thresholds that cause Social Security taxation. So, while you may be looking for a stable, predictable, tax-free income stream, you could unwittingly lose a portion of your Social Security along the way. Municipal bonds are usually very attractive for retirees and would-be retirees because they promise low-risk and tax-free income. However, David has noticed five glaring issues about municipal bonds and explains why you should be extremely cautious about investing in them. Municipal bonds are not always entirely tax-free. Yes, they are free from federal tax, but they are often taxed at the state level if it’s not a bond issued by your resident state. Currently, 43 of…
