This “Miracle” 8% Dividend Actually Cuts Your Tax Bill

Here’s something you may not know about closed-end funds (CEFs) : they can give you a much lower tax bill than if you buy and sell stocks yourself. And if you follow the first-level strategy most folks do and invest through an index fund like the SPDR S&P 500 ETF (SPY), you’re almost certainly paying more tax than you need to. Worse, you’re stuck with a 2% dividend that falls way short of the 8%+ CEF payouts you need to fund your retirement on a reasonably sized nest egg. CEFs’ tax advantages stem from the fact that they have skilled pros running the show—and these managers know how to cut the taxes you’ll pay on the big dividends they send you.… Read more