I live in Washington state, which has zero state income tax. I'm also in the 35% federal marginal tax bracket. Finally, I'm worried about putting my money in stocks right now. So I've been looking at buying individual short term (less than 2 year) municipal bonds from all over the country. (If you live in a state with zero income tax, you can buy muni bonds from anywhere in the country and not pay federal taxes).
I've noticed a lot of bonds rated BBB and higher ("investment grade") from places like Illinois, New Jersey, and Connecticut. These places are in the news quite a bit for their eternally heavy debt load.
However, according to S&P, usually less than 1% of investment grade bonds default - this was true even in 2008-2009.
Do I need to worry about putting my money in short term, investment grade bonds from these states?
Submitted August 27, 2018 at 01:11AM by Power80770M https://ift.tt/2LtbqrV
