1
 
                          MERRILL LYNCH BALANCED FUND
                         FOR INVESTMENT AND RETIREMENT
                            ------------------------
                      SUPPLEMENT DATED JANUARY 6, 1994 TO
                       PROSPECTUS DATED JANUARY 29, 1993
                            ------------------------
 
     The disclosure set forth under "Initial Sales Charge Alternative -- Class A
Shares" is modified as follows:
 
     Initial sales charges may be waived for shareholders purchasing $1 million
or more in a single transaction (other than a tax qualified retirement plan
under Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"),
or deferred compensation plan under Section 403(b) and Section 457 of the Code),
or a purchase by a TMASM Managed Trust, of Class A shares of the Fund. In
addition, purchases of Class A shares of the Fund made in connection with a
single investment of $1 million or more under the Merrill Lynch Mutual Fund
Adviser Program will not be subject to an initial sales charge. Purchases
described in this paragraph will be subject to a contingent deferred sales
charge if the shares are redeemed within one year after purchase at the
following rates:
 


                                                         CONTINGENT DEFERRED SALES
                                                         CHARGE AS A PERCENTAGE OF
                                                         DOLLAR AMOUNT SUBJECT TO
        AMOUNT OF PURCHASE                                        CHARGE
        ------------------                             -----------------------------
                                                               
        $1 million up to $2.5 million..................             1.00%
        Over $2.5 million up to $3.5 million...........             0.60%
        Over $3.5 million up to $5 million.............             0.40%
        Over $5 million................................             0.25%

 
Code #10331S-1