Dividends4Life: A Tax-Free 6.1% Yield to Trounce Stock Dividends

Taxes can eat up investing returns. Anyone who’s bought stocks and filled in a tax form knows this. But you don’t need to pay taxes on your investments—in fact, you can get a higher stream of income without paying any taxes altogether. The secret: municipal bond funds. This is especially important if you’re in the 25% income tax bracket or higher—and if you’re earning over $36,900, that means you. Fortunately, there are plenty of options. Here are three.

First, there’s the Pimco Municipal Income III (PMX), which pays a 5.9% dividend. To diversify, let’s add the Deutsche Municipal Income Fund (KTF) and the Pioneer Municipal High Income Advantage Fund (MAV). These are funds with strong distribution histories and good access to the municipal credit markets. Now we’re talking, an average 6.1% yield.

Source: InvestorPlace

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