Municipal Bond Forum
Muni bond investing at 70
Q
Your Web site is full of excellent and useful information on investing in municipal bonds. However, I am 70 and retired (my wife is 68) and we need to produce about $35,000 per year in after-tax income from a muni-bond portfolio for the next five years and then have it adjusted to cover cost-of-living increases as they occur. I would hope to live to 90, or about 20 years from now, which would be my investment horizon. In my case, the use of 30-year bonds would not be feasible, (in 30 years I would be 100). Therefore, what is your strategy/opinion on investing in intermediate-term munis (20- year bonds) in our particular case?
A
James A. Klotz responds:
Your goal should not necessarily be to outlive your investments. The goal should be to create as much income as possible in your lifetime, since bonds are treated the same as cash in your estate. Over the years we have also found that individuals are not always accurate when pinpointing their own “maturity date.”
We cannot answer your questions regarding your income needs without knowing the amount of funds available for investment.
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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.