Taxes may be going up – again – in the near future.
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Question: Do Tax-free municipal bonds have a place in your portfolio?
Answer: Generally, if your income tax rate, after deductions, is 25% or higher, you may be good candidate for tax-free bonds.
Question: What are my choices, when seeking tax-free income?
Answer: You have several choices:
DIY. This involves buying bonds from brokerage firms and doing all the research and monitoring for both credit quality and prices. Transparency can be challenging and markups are not disclosed, so you may significantly overpay. But at least there are no management fees and you can assemble a portfolio of individual bonds, each with a stated final maturity.