How to Get Higher Rates on Safer Bonds

Municipal Bond: The bond market is a difficult place to earn a livable income during times of very low interest rates. The only way to earn a decent yield is to take risks on lower-quality bonds or to accept much longer maturity curves than good sense dictates.

But if you know where to look, there’s a virtually unknown feature in some bonds that can significantly increase your current income and beat the biggest threat to your money in the current bond market, while offering the increased level of safety that bonds are known for.

This almost-too-good-to-be-true trait is called a “death put.” It works in every portfolio, but it’s especially effective for those in or near retirement who need higher income and higher quality.

A death put enables the estate of a deceased bondholder to sell the bond back to the issuer at par. No matter how low the price has dropped, a bond with a death put matures at par upon its owner’s death.

And this unique quality normally doesn’t cost any more than a bond with traditional maturity features.

The Danger of the Long Curve

Maturity risk is where most bond buyers will

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