AlisterTalksBonds.com Sharon Alister logo

Search

stifel logo
 
AlisterTalksBonds.com Sharon Alister logo

Search

stifel logo
 

Should You Buy Tax-Free or Taxable Bonds?

Generally speaking, all ERISA accounts like IRAs, Pension and Profit Sharing accounts, and other retirement accounts should invest in taxable bonds. Also, individuals who are in a tax bracket below about 25% should invest in taxable bonds as there is no additional tax advantage beyond what is already offered in these accounts. Almost always, the amount of interest you get to keep after paying taxes is more than you would receive from tax-free bonds.

If you have entered the 25% tax bracket or higher, tax-free bonds may be appropriate for you in your non-ERISA accounts. However, be sure you are using taxable bond income for your earnings up to the threshold of that 25% bracket.

Click here for an outline of which bonds are Taxable or Tax-Free

Click for Should you buy Tax-Free or Taxable Bonds PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

04/27/2018 Today’s Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14

 

today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Should You Buy Tax-Free or Taxable Bonds?

Generally speaking, all ERISA accounts like IRAs, Pension and Profit Sharing accounts, and other retirement accounts should invest in taxable bonds. Also, individuals who are in a tax bracket below about 25% should invest in taxable bonds as there is no additional tax advantage beyond what is already offered in these accounts. Almost always, the amount of interest you get to keep after paying taxes is more than you would receive from tax-free bonds.

If you have entered the 25% tax bracket or higher, tax-free bonds may be appropriate for you in your non-ERISA accounts. However, be sure you are using taxable bond income for your earnings up to the threshold of that 25% bracket.

Click here for an outline of which bonds are Taxable or Tax-Free

Click for Should you buy Tax-Free or Taxable Bonds PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

04/27/2018 Today’s Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14

 

today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Investing involves risk, including possible loss of principal. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall. Adversely, as interest rates fall, bond prices will rise.

Copyright © 2013 | Stifel, Nicolaus & Company, Incorporated. Member SIPC & NYSE, All Rights Reserved