Thursday, November 11, 2010

When the Government Owes You

Every tax payer wonders where the money he hands over to the government is going. And most feel that what they get in return for their taxes is not enough. The feeling that the government owes us is a common one. But let’s face it, taxes are not going to get lower. And except for the occasional income tax refund, once taxes are paid, the money is gone. So how do you get back some of what the government owes you? Have you thought about municipal bonds?

These are debt instruments issued by state and local governments. It may sound like another way of giving money to the government, but it’s not. You are not giving your money, but loaning it. And you get it back with interest. In most cases, the interest you earn is exempt for federal taxes. With municipal bonds, you are not just supporting your government, but will make a profit by doing so. It’s true that the interest you earn may be lower than other investment options, but that is balanced out by the security that these bonds offer and the tax exemption. You can redeem these bonds at any time prior to maturity, if you need the money, although there is a risk that fluctuating market conditions may affect the redemption value negatively. Integrating municipal bonds into your financial planning is a good option and enables you to get back a bit of what the government owes you. At Allied Brokers we will help you to plan your insurance coverage and investments to maximize your coverage and protect your financial future. Contact us for all your retirement planning, estate planning and life, business, home and health insurance needs. We have been serving the needs of Santa Clara residents and businesses for over 50 years and we have done this by understanding our clients’ needs and offering them the benefit of our experience to enable them to plan their financial futures. Visit http://www.alliedbrokers.com/ to learn more.

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