My Bucket #2: Which Bond Funds Do You Recommend?

[Cheesehead]

Recently retired, after much research, we decided to use the Bucket Strategy of income withdrawal. I realize it's mainly for visualizing and not freaking out when the market corrects or crashes. My wife panics at market downturns so this will work out well. I know what we will do for Buckets 2 & 3 but need advice for #2.

I have collected articles advice on buckets from Christine Benz of Morningstar, Evensky, Wintrust, Kiplinger, Quinn and other experts and distilled it down to:

High Quality Short & Intermediate Bond Funds​

Also, some experts recommend a balanced fund so for that I figure Wellsely. I suppose for much of it I can use Vanguard's Total Bond Market Index but do you have any other suggestions? They also suggest some inflation protection.

Thanks,

Nick

 

[audreyh1]

Christine over at M* has good recommendations about what to have in each bucket. She's been quite consistent over the years writing articles about the bucket strategy.

 

[jazz4cash]

Thanks for the question and reference. I need to do some homework on my quasi-bucket strategy. So far I'm mostly using CDs in lieu of bonds but need to consider some actual bond exposure and strategy to exchange between buckets. I do accept total return strategy is better but buckets feel safer since I also have DW who is jittery about stocks.

 

[43210]

Duplicate thread
http://www.early-retirement.org/for...nk-bond-fund-under-stocks-or-bonds-89274.html

 

[audreyh1]

Duplicate thread
http://www.early-retirement.org/for...nk-bond-fund-under-stocks-or-bonds-89274.html

That's not a duplicate thread, just similar. This is more general.

 

[24601NoMore]

Huge fan of Wellesley here..best Balanced fund you can buy IMHO. VTMFX is also very good.

For bonds - PONDX hands down. VWITX for tax-free Intermediates. PRRIX for TIPS. VWEHX &/or PIGIX for Corporates. FFRHX for Bank Loan.

All JMHO. I was late getting into bonds - too heavy equities for many years. Always seems "now" is the wrong time to get into bonds for a variety of reasons but definitely good to have some for diversification..

 

[Mr._Graybeard]

The total return on investment-grade corporate intermediate and short-term bond funds is so low, you might as well stay in CDs and avoid the interest rate risk. Three-year CD yields are at 2% right now.

 

[gayl]

I was in PONDX for quite a while but went to PWZ for tax free CA .... are you trying to (1) minimize taxes or (2) think bonds are less risky (while ignoring inflation risk). If (1) check out your state's munis on Moodys, if (2) I agree with CDs for now

 

[Mr._Graybeard]

Most muni bonds issued in Wisconsin are not exempt from state income tax, unfortunately.

 

[gayl]

limited to GOs?

 

[Gotadimple]

I believe Cheesehead wants bond fund recommendations because they are constructing an AA to will reduce volatility. Seriously Cheesehead, Christine Benz make recommendations of funds to use with the bucket strategy articles - some keyed to specific brokers (i.e., Fidelity, Schwab, etc.) so you get the lowest expense ratios.

- Rita

 

[gayl]

In that case

The total return on investment-grade corporate intermediate and short-term bond funds is so low, you might as well stay in CDs and avoid the interest rate risk. Three-year CD yields are at 2% right now.

+1