Hello,
I am not sure if municipal bonds (national munis as I am in a low tax state) would be useful in my situation.
Here is my dilemma:
I am currently in a high marginal bracket (right at the top of the 32% or bottom of the 35% depending on the year). However, probably within 5-10 years, that will no longer be the case and will likely be in the 12% or 22%. While I think municipals make sense for me now, they certainly won't in the future and I would likely want to replace them with taxable bonds.
In that scenario, does it make sense to acquire municipals now? Right now, I figure I would be ahead about 1%/year in terms of tax equivalent yield by using a muni vs taxable bond fund. But is the 1% worth the hassle when faced with potential capital gains in the near term?
Thanks for your input.
I am not sure if municipal bonds (national munis as I am in a low tax state) would be useful in my situation.
Here is my dilemma:
I am currently in a high marginal bracket (right at the top of the 32% or bottom of the 35% depending on the year). However, probably within 5-10 years, that will no longer be the case and will likely be in the 12% or 22%. While I think municipals make sense for me now, they certainly won't in the future and I would likely want to replace them with taxable bonds.
In that scenario, does it make sense to acquire municipals now? Right now, I figure I would be ahead about 1%/year in terms of tax equivalent yield by using a muni vs taxable bond fund. But is the 1% worth the hassle when faced with potential capital gains in the near term?
Thanks for your input.
Statistics: Posted by Darth Vanguard — Mon Apr 22, 2024 4:30 pm — Replies 2 — Views 128