Thoughts on New Merrill Edge IRA and Fixed Income Choices

[Healthy Lifestyle]

I recently retired (age 66) and in the process of transferring my Merrill 401K account to Merrill Edge (ME) Traditional and Roth IRA's.

I hope it was/is a good choice only for the ease of transfer to the IRA side, where I can have more control and fund choices.

I generally follow the Boglehead approach to investing in retirement and am a self-directed investor.

I would like to position myself initially as a 40 or 50% Equity index ETF funds holder (VTI comes to mind), maybe some international (VXUS?).

My decision is unclear on what to do with the Fixed Income portion in either bonds or CD's, etc. Any of these currently will be better than my old Stable Value fund..

Total Bond Market (BND) is always discussed, but I am not excited about that at the moment.

There are some ME money market funds available yielding ~4.4% (TTTXX) but don't know much about them?

I am new to ME and learning as I go, so I would greatly appreciate the groups comments and suggestions if you so choose.

Thank you!

 

[Golden sunsets]

We are Bank of America lifers, on the bank side and the investment side. Our taxable brokerage and IRA's are Merrill Edge accounts. I like the dashboard and the interface between the bank side and ME side. I do have one complaint. The individual bond offerings (as opposed to bond funds), I found to be inferior. Too few options. Higher prices/lower yields on comparable instruments. I finally opened a brokerage account at Fidelity and moved our taxable fixed income money out of ME to Fido. I've been happy there. I think Schwab would work as well. Good luck.

 

[Healthy Lifestyle]

We are Bank of America lifers, on the bank side and the investment side. Our taxable brokerage and IRA's are Merrill Edge accounts. I like the dashboard and the interface between the bank side and ME side.

Thank you Golden Sunsets for your comments.
As a new Merrill Edge IRA holder, I may place 50 or 60% in fixed income.
Do you recommend and or have any positions in fixed income MM funds, CDs, etc.?

 

[Golden sunsets]

Thank you Golden Sunsets for your comments.
As a new Merrill Edge IRA holder, I may place 50 or 60% in fixed income.
Do you recommend and or have any positions in fixed income MM funds, CDs, etc.?

Each person must do their own due diligence and each situation is different of course. Having said that, Dh and I each have a fairly sizeable IRA, still at ME. A healthy percentage of those funds are in fixed income. So my complaint re ME's limited bond offerings is the same, however we are reluctant to move those IRA's to Fido because we like the ME platform. We like the tools better than the Fido website. We do not like bond funds and prefer individual bonds or exchange traded target date bond funds. There are several long threads on this forum that you might find useful. One is on Treasury Bills, Notes and Bonds. Another is on Bonds vs Bond Funds. A third is called We are Entering the "Golden Period" of Fixed Income Investing. And a last thread is Best CD, MM Rates and Bank Special Deals.

Our investment model involves setting a 10 year bond ladder in our IRA's which roughly equals our estimated RMD's for each year. We are already in RMD territory, so we have a pretty good idea of our RMD's not only for the current year, but for the next 10 years. We have structured our IRA fixed income investments to produce yearly maturities equal to those RMD's. Each year we add another rung. The fixed income instruments we use are, individual corporate bonds, Treasuries, Target date maturity index funds and CD's (brokered CD's are available on the ME platform). As I said, we do not use Bond Funds. Many of course do use and swear by Bond Funds, but they have gotten killed this year, as you may know. As long as you buy bonds at par or below, and don't sell them prior to maturity, you will not lose principal. We stick to investment grade bonds, so the risk of default is highly unlikely. At Merrill Edge, under the Research tab on their platform, you will see a fixed income section. Within that section you can select the screener and then filter for bonds of different types that meet your investment criteria. If you have not done your own investment selection in the past, you might want to start reading about investments. You may feel the need for advice from an investment adviser, but there will be a cost.

 

[Healthy Lifestyle]

There are several long threads on this forum that you might find useful. One is on Treasury Bills, Notes and Bonds. Another is on Bonds vs Bond Funds. A third is called We are Entering the "Golden Period" of Fixed Income Investing. And a last thread is Best CD, MM Rates and Bank Special Deals.

Thank you for these helpful leads and have been reading these threads
that catch my attention!

Our investment model involves setting a 10 year bond ladder in our IRA's which roughly equals our estimated RMD's for each year. We are already in RMD territory, so we have a pretty good idea of our RMD's not only for the current year, but for the next 10 years. We have structured our IRA fixed income investments to produce yearly maturities equal to those RMD's. Each year we add another rung. The fixed income instruments we use are, individual corporate bonds, Treasuries, Target date maturity index funds and CD's (brokered CD's are available on the ME platform). As I said, we do not use Bond Funds.

Great information, and I do try to follow this disciplined approach in my
Vanguard accounts where I like more options and low fees in the fixed
income universe.

I need more experience and confidence using Merrill Edge on the fixed income side.

I appreciate and am thankful for your wisdom!

 

[xlf11]

Both TTTXX and TSTXX have similar 4%+ rate, but they need to be brought through MF via website. They are great temp MM before you make decision on what to invest. Be aware they need to be sold before available for investment, slightly inconvenient in comparison with ME default MM.

 

[Healthy Lifestyle]

Both TTTXX and TSTXX have similar 4%+ rate, but they need to be brought through MF via website. They are great temp MM before you make decision on what to invest. Be aware they need to be sold before available for investment, slightly inconvenient in comparison with ME default MM.

Thanks xlf I apppreciate your input!

 

[SunGuy]

Fidelity is way better

 

[Franklin]

Thank you Golden Sunsets for your comments.
As a new Merrill Edge IRA holder, I may place 50 or 60% in fixed income.
Do you recommend and or have any positions in fixed income MM funds, CDs, etc.?

Just placed a large deposit with ML in a money market (FIGXX and FISXX). You can look them up on the ME site. Rate was 4.49% with same day liquidation. I have an EDGE (self directed) and a FA managed group of funds. I looked them up and there were many to choose from. I just needed daily liquidity. You can get a slightly better rate if you agree to transaction plus 2 days.

 

[Healthy Lifestyle]

Just placed a large deposit with ML in a money market (FIGXX and FISXX). You can look them up on the ME site. Rate was 4.49% with same day liquidation. I have an EDGE (self directed) and a FA managed group of funds. I looked them up and there were many to choose from. I just needed daily liquidity. You can get a slightly better rate if you agree to transaction plus 2 days.

Thanks for mentioning these two MMF's which I will keep an eye on.

I also recently moved a large deposit with Merrill Edge (self directed) in my
new IRA account placing the cash in TTTXX and TOIXX (similar yield).

Are all of ME mmf's offering daily liquidity?

 

[Franklin]

Thanks for mentioning these two MMF's which I will keep an eye on.

I also recently moved a large deposit with Merrill Edge (self directed) in my
new IRA account placing the cash in TTTXX and TOIXX (similar yield).

Are all of ME mmf's offering daily liquidity?

Nope, they offer T plus 1day or t (Transaction) plus 2 days, Gotta get them in by 2:30 for same day to get cash the next day. Realistically waiting 2 days is no big deal and can get you about 10 more basis points. If i need cash I just transfer it over to my BofA account from ML. I think you are smart to see how this current market settles out. I actually left some money with an FA and that allows me some better options than solely with ME. But my main balances are with ME.

 

[xlf11]

Another option may be using short term Tnote ETF such as TFLO (7 days yield of 4.7% and expense of 0.15%), which can be traded in real time.

 

[Healthy Lifestyle]

The information is much appreciated, and I will check out the Tnote ETFs.