Dividends4Life: The 6% Retirement Income Stream You Likely Haven’t Considered

One question I get a lot from readers concerns retirement income: “Robert, saving accounts pay out next to nothing. Bank CDs yield less than one percent. Where can I earn a safe income on my savings?” No doubt, savers have seen better days. The Federal Reserve has zapped the retirement plans for millions of Americans. Most feel stuck between meager returns in fixed income or stomach-churning volatility in stocks. That said, one pocket of high yield remains. You can count on these payouts for safe, dependable returns. Thousands of Americans already rely on these for their retirement income. I’m talking, of course, about...

Municipal bonds. In essence, a municipal bond is just a loan to a local government. Investors pony up the cash to fund schools, bridges, and other projects. In exchange, cities and states pay regular interest income. These bonds gush cash flow. The typical municipal bond pays out two to three times more than U.S. Treasuries. For those willing to shop through the market’s discount bin, you can often find payouts as high as four, five, or even six percent. Better still, “Uncle Sam” loves them. The federal government wants to encourage lending to municipalities. For this reason, you don’t have to pay federal income taxes on interest earned from these bonds. The Nuveen AMT-Free Municipal Credit Income Fund (NYSE:NVG) tops my list. This fund owns hundreds of municipal bonds, including local agencies like airports, toll roads, and sanitation departments. These irreplaceable assets deliver steady profits, providing recession-proof streams of cash flow.

Source: Income Investor

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