Municipal Bond Forum
Advice different for an 80 year old?
Q
I’ve been a long-time client and have been following FMS’ advice on taking tax-free income and holding my bonds to the end for return of capital. I am now 80 ½ years old. I read your article, “Bad Medicine for an Imaginary Illness,” and cannot see how it applies to my specific situation. As a client who is over 80, what do you recommend I do with my long-term holdings?
A
James A. Klotz responds:
We are quite pleased that by taking our advice, you have been earning a generous, consistent stream of tax-free income that could only have been achieved by investing in long-term municipal bonds.
Our advice to an 80-plus-year-old client is the same it is for all of our clients. We always recommend, that after taking quality into consideration, you maximize your income by continuing to buy long-term bonds as your investment dollars become available.
As a long-term investor, I’m sure you recognize that sometimes your bonds are worth more than you paid for them, and sometimes less. Your tax-free income, however, remains constant.
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