Index And Municipal: Comparing Bonds

Some employees nearing the age of retirement start to really think about the future. The first thing that comes to mind is what to do after retiring. A close second is if they have the means to do what they want to do.
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Retirement should be prepared for. In the past, retirees could depend on 401ks as their employers offered retirement benefits that could hold them until old age. However, with the inflation rate of the past decades and increase in taxes, it seems that retirees would hardly survive on a 401k.

It’s a good thing there are alternative investments. For this article, we’ll focus on index and municipal bonds and their key differences.

Index funds are quite popular among investors. They have amazing tax advantages and don’t require that huge a capital compare to other alternative investments. Index funds also allow investors to incorporate a buy-and-hold strategy, which makes them safer than most. They also have a lower tax gain.

On the other hand, what makes municipal bonds a favorite among investors, is that their monthly dividends are virtually tax-free. While not enough to provide a comfortable retirement on its own, municipal bonds are an amazing avenue to earn supplemental income. However, they are among the more expensive investments.
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Whatever alternative investment an investor chooses, financial consultants are unanimous in believing that the best course of action is to start investing as soon as possible.

Barry Bulakites is the co-founder, president, and chief distribution officer of Table Bay Financial Network. He is a recognized innovator and speaker in the field of financial services. Learn more about him here.

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