Rush to munis could boost Medicare premiums
The income calculation for Medicare and Social Security includes tax-exempt interest on municipal bonds.
July 22, 2021 4 MINS
Wealthy investors are rushing to buy munis in an attempt to mitigate the impact of threatened tax hikes. They may be shocked to learn that municipal bonds’ tax-exempt interest is included in the income calculation that triggers Social Security taxes and Medicare premium surcharges
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In the first six months of 2021, municipal bond funds attracted an estimated $56.9 billion in net new money the most for any first half of the year dating back to 1992, according to data from Refinitiv Lipper.