Municipal Bond Forum
Bonds for an IRA
Q
I think tax-free municipal bonds are a great investment and I have a number of them. But are they right for an IRA? I have to pay taxes when I withdraw from my IRA anyway, as ordinary income. Is there a better “taxable” investment that makes sense for an IRA?
A
James A. Klotz responds:
In a normal fixed-income market environment, taxable bonds will yield more than tax-free bonds, which makes them the preferred investment choice for IRAs and other retirement accounts, as income can accumulate on a tax-deferred basis.
All IRA distributions are subject to taxation.
There are various corporate and taxable muni bonds we recommend for IRA investments.
Start here.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.