Hi bleary,When I was five years from retirement, I wish I had put 5 year's worth of expenses into a fixed-income ladder. VickiSpouse just retired last July. I'm trying to figure out the cash flow now. Like you, it's 28% federal and 9.3% CA taxes in general. I decided that holding "bonds" to maturity made the most sense to me. It's an investment I can understand. Bond funds or selling bonds before maturity are confusing at best. ("Bonds" for me include Treasuries and CDs.)When I last ran the numbers, Treasuries (no CA tax) beat both CDs and Munis. Munis seem aimed at the 33% tax bracket. Do Munis trigger AMT?Quickly checking 5-year non-callable rates:CDs 5.10Treasuries 4.70AAA Munis 3.75Assume $100,000 to make the math easy. You plug in your own numbers.CD interest = 5100CA tax on interest = 5100*.093 = 474.30US tax on interest = (5100-474.3)*.28=1295.20after tax from CD= 5100-474.30-1295.2 = 3330.5Treasury interest = 4700no CA tax. US tax = 4700*.28 = 1316After tax from T-bill = 3384Muni interest = 3750. No tax.That's how I do it.Vickifool
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