Bonds in early retirement

[ThisTooShallPass]

Hello everyone,

I am an early retiree (now 45).  I have about 20% in muni bonds and 80% in stock indexes.  The muni carried over since I was in a high tax bracket.  Now in my early retirement, with low tax bracket (probably 10% or less) I am considering it to move from municipal bonds to BND. 

Any advice on this move? Should I stay with muni (VMLUX and VWIUX) or move to BND. If not BND then what would be a good vehicle. 
Basically that will have 1-3 years worth of my expenses at any given time.  Or should I keep the 1 year expenses in some other place and keep the 2nd and third year some where else? Appreciate your feedback.

Thanks.

[terran]

Do you have any tax advantaged accounts or only taxable? If you have both, see https://www.bogleheads.org/wiki/Tax-efficient_fund_placement

[MustacheAndaHalf]

You might want to compare before you switch.  At a quick glance, VTEB beats BND even in the 10% tax bracket.  With yields at historic lows, lower duration means a smaller loss if/when rates go back up.

Vanguard Tax-Exempt Bond ETF (VTEB)
1.09% SEC yield, 5.4 year duration

Vanguard Total Bond ETF (BND)
1.16% SEC yield... 1.05% after tax?,  6.5 year duration

[ThisTooShallPass]

Do you have any tax advantaged accounts or only taxable? If you have both, see https://www.bogleheads.org/wiki/Tax-efficient_fund_placement

I do have tax advantage accounts but I won’t withdraw from it for next 20 years. I will have to withdraw from my taxable accounts for the next 20 or so years.

[ThisTooShallPass]

You might want to compare before you switch.  At a quick glance, VTEB beats BND even in the 10% tax bracket.  With yields at historic lows, lower duration means a smaller loss if/when rates go back up.

Vanguard Tax-Exempt Bond ETF (VTEB)
1.09% SEC yield, 5.4 year duration

Vanguard Total Bond ETF (BND)
1.16% SEC yield... 1.05% after tax?,  6.5 year duration

Good point. Thank you!