Muni Bonds
There are taxable muni bonds issued by local governments, and these are what you often see in retirement plans. Local governments issue taxable bonds when they need to finance something and the use of the proceeds is not permitted by IRS regulations to be financed with tax exempt debt. About 5-10% of the muni bond market is taxable debt. Those bonds are subject to federal tax, but exempt from state tax.
Buy new issues whenever possible, because you buy the market price on that day, and the underwriting commission is paid by the bond issuing local agency.
I am negative on interest rates going forward, so buy short to intermediate bonds unless you want to get killed if we enter a period of stagflation, which I would not be surprised to see.
I have worked in the bond industry many years.
Tmcal6
