Reddit Investing

Bond funds for CA resident in 32% bracket

Hi all,

I have a large amount in cash just sitting around in a money market fund, and I feel like I should do something with some of it. It’s potentially for an apartment or house down payment in 2-3 years, so with that kind of short time frame I don’t want to expose myself to large downside risks like equities with this money (I have other equity investments).

I am curious if anyone else is in a similar situation where they are also a CA resident in a 32%+ federal tax bracket.

At this point, a bond fund that produces current regular income is a lot less valuable to me than others. With a marginal tax rate of over 40%, some corporate or emerging market 4%ish bond fund yield would realistically barely beat inflation (4% * (1-0.4) = 2.4% post tax yield). Such a low yield doesn’t seem worth the downside risk (10%+) of bond fund ETFs compared to my FDIC insured money market yield of 2% ish (or 1.2% post-tax).

Some options I have researched:

– US treasuries might be free from state tax? that slightly helps by 10% or so

– CA municipal bonds are apparently federal tax free? Are there ETFs for Cali muni bonds that are known to meet the tax free status that are available?

– Do I chase high yield in risky bond funds? This seems strictly worse than just investing further in stocks where I could go for high growth and low dividend – and pay cap gains instead

Bond funds for CA resident in 32% bracket – RobinHood – Reddit Feed


View Reddit by vansterdam_cityView Source

reddit investing reddit stocks reddit stock market make money online reddit r investing
stash invest reviews stash invest stash app review reddit forex investing reddit betting




reddit make money
betterment reddit
best savings account reddit
reddit make money from home
stash invest app
what is stash invest
reddit stock price
earn money online reddit
reddit money
stash investment app review
reddit penny stocks

About the author

reddit personal finance

Leave a Comment