Zero coupon municipal bonds are attractive to investors seeking tax advantages and long-term capital accumulation for retirement, education funding or other long-range savings goals. Individuals can time the maturity of their investment to match their future needs. Here are some of the reasons to invest in a zero coupon municipal bond:

• Retirement planning. Zero coupon municipal bonds can be used to supplement a retirement savings program. They are not, however, suitable for Individual Retirement Accounts (IRAs) or qualified pension plans because these plans already have tax-advantaged status.
  
• Education funding. A municipal zero portfolio can be structured to mature during a child's or grandchild's college years.
  
• Gifting. Assets given today under the annual estate and gift-tax exclusion of $11,000 per person can continue to grow with the tax benefits of zero coupon municipal bonds.
  
• "Kiddie tax". Zero coupon municipal bonds are more attractive than ever before for gifting to minor children under age 14. Since passage of the Tax Reform Act of 1986, Uniform Gift to Minors Accounts generating more than $1,600 in annual income for these children are taxed at the parents' or guardians' rates.
  
• Supporting an elderly parent In today's aging society, more people are spending large amounts of money providing care for their aged parents. Zero coupon municipal bonds purchased now can help meet those future needs.