I am unclear about what to do with the fixed income part of my portfolio, and so I have been simply buying 6 month T bills and CDs. However, due to the reinvestment interest rate risk, I know I should do something a bit more long term than 6 months : )

I am 28% tax bracket, and 9.3% state tax. I have about 300k to put into fixed income, and am about 5 years from retirement. I cannot seem to figure out whether I should try to find California muni bonds (our state of residence) or just buy a bond fund. I am reluctant to buy a long term bond fund because of interest rate risk. At present, I have the Vanguard tax-free intermediate term bond fund (VGAIX), but don't know if I should put more into that, or use some other fund(s) or buy individual bonds.

Can anyone elucidate this for me? Thanks in advance.