Sentences with phrase «investor is in a lower tax bracket»

Not exact matches

Although municipal bond yields are generally lower than taxable bond fund yields, some investors in higher tax brackets may find they have a higher after - tax yield from a tax - free municipal bond fund investment instead of a taxable bond fund investment.

The other side of that is that it may not make sense for investors in lower tax brackets.

This means that dividend income will be taxed at a lower rate than the same amount of interest income (investors in the highest tax bracket pay tax of around 25 % on dividends, compared to 50 % on interest income).

For investors in lower tax brackets, qualified dividends are sometimes not taxed at all.

Because tax - exempt interest generated by municipal bonds is usually more beneficial for investors in higher tax brackets, municipal bonds may not be appropriate for all investors, particularly those in lower tax brackets.

This is true for most investors in the lower tax brackets.

Therefore, higher - income investors (with theoretically higher tax bills) are likely to benefit more from municipal bond yields than individuals in lower tax brackets.

That was because the net aftertax yield would be well above that of Treasuries even for investors in lower tax brackets.

Capital gains are not only taxed at a lower rate in the highest tax brackets, but investors can also control when to take them — dividends, on the other hand, are taxable in the year they're paid, even if you reinvest them.

Similarly, the «break - even» interest rate is lower for investors in lower tax brackets.

This is great for investors sitting in the lower tax brackets.

The lower tax - free yields offered by muni bonds and tax - exempt mutual funds are often more valuable to investors in the top tax brackets.

But, because I bonds continue earning for 30 years, most investors can hold onto the bonds until they are in a lower tax bracket, and then redeem the bonds.

Unfortunately, most investors will be in lower federal and state tax brackets upon retirement since they will lose their primary sources of income (wages, salaries, commissions, bonuses, tips, etc.).

Assuming, however, that our investor will retire in a lower tax bracket — say, 30 % — the actual value of his RRSP would be $ 700,000 after accounting for taxes.

This is to model the worst - case scenario, so detractors can't say, «Yeah that's the way those cookies crumble with low tax rates, but for investors in high tax brackets, waiting as long as possible to claim PIA benefits is better.»

In so doing, they allow the investor to pay tax on that income at a much lower tax bracket than would have been the case with ordinary earned income.