Bond options in retirement account

[Goatfan]

I want to build a 3 year cash bucket in my husband’s 403b. I don’t have many options. Any thoughts on how to pick one fund or the other. He is retiring in 4 years. We will need to take distributions every year from this account. I have the option of AUL stable value. They don’t say the interest rate but is was 1% six months ago when I called to inquire. I have tried to research each fund and this is what I found. My other choices are:

EVBLX Eaton Vance Floating Rate - B & BB bonds 1.11% ER

MWTRX Met West Total return - Gov and AAA .65%ER

BHYAX Blackrock High Yield mostly B & BB rated bonds .94 ER

EADOX. Eaton Vance Emerging Mkt Debt Opportunity 1.02 ER

My husband is a pastor and there are huge tax advantages to leaving it in a church sponsored 403b because what you use for housing comes out tax free.

 

[COcheesehead]

You can plug off these symbols into a fund research/screener comparison tool. Fidelity has a good one. There likely are others. It will then allow you to compare returns, income, expenses, ratings, etc.
https://fundresearch.fidelity.com/fund-screener/

 

[Goatfan]

Thank you. I will use that.

 

[disneysteve]

What awful choices. Given that you’ll start spending this money in 4-5 years and it’s the one with the least bad expense ratio, I’d probably go with the Met West fund.

 

[Exchme]

Emerging markets and high yields bonds are inherently risky and unsuited for what you asked for. The only choice that is high quality bonds is MWTRX and its duration is 3.75 years, so not a terrible fit. It seems to be using leverage to try to juice the returns, which seems opposite what you want in a bond fund. Still, it's probably the best of the bunch.

As you get closer to the date you need the money, you can start moving some to the stable value fund, so the dollar weighted average duration of your holdings matches the average time until you need the money.

 

[xlf11]

Check to see if the retirement account allowing brokerage option. If ok you should have access to ETF, CD and tbills etc.

 

[Goatfan]

I checked. We are stuck with these choices. Thanks for your reply.

 

[Goatfan]

I was thinking about going the safest and least expensive route. Really just want the money there when we need it.