The expense ratio of the fund you trust to get you to (and support you throughout) retirement just got lower. The newly merged Vanguard Target Retirement Funds now have a lower expense ratio of 0.08%. This will reduce expenses up to 47% for shareholders!*
Here's what's changing:
Previous expense ratios
|
New expense ratios
|
|
|---|---|---|
| Target Retirement Income Fund | 0.12% | 0.08% |
| Target Retirement 2015 Fund | 0.12% | 0.08% |
| Target Retirement 2020 Fund | 0.13% | 0.08% |
| Target Retirement 2025 Fund | 0.13% | 0.08% |
| Target Retirement 2030 Fund | 0.14% | 0.08% |
| Target Retirement 2035 Fund | 0.14% | 0.08% |
| Target Retirement 2040 Fund | 0.14% | 0.08% |
| Target Retirement 2045 Fund | 0.15% | 0.08% |
| Target Retirement 2050 Fund | 0.15% | 0.08% |
| Target Retirement 2055 Fund | 0.15% | 0.08% |
| Target Retirement 2060 Fund | 0.15% | 0.08% |
| Target Retirement 2065 Fund | 0.15% | 0.08% |
As the only investor-owned investment firm, we’re committed to making continuous improvements to help investors achieve success.** The latest changes reduce the investment costs for all Target Retirement Fund investors—allowing them to reinvest or withdraw more of their returns.
If you own a Target Retirement Fund, you’re in good company: 1 in 5 Vanguard retail clients has a Target Retirement Fund (as of November 31, 2021). The greatest benefit is the simple design: By investing in a single mutual fund, you get a diversified portfolio that you don’t have to rebalance or adjust. The fund’s managers gradually shift the fund's asset mix to fewer stocks and more bonds as you get closer to retirement. The fund that seeks growth when retirement is far away becomes the fund that seeks income when retirement approaches.
The average Vanguard Target Retirement Fund expense ratio is now 84% less than the industry average.***
Begin with a clear, appropriate goal. Your retirement goal can be as simple as determining how much you can save and identifying the year you want to retire. A Vanguard Target Retirement Fund can take care of the rest.
*The highest Vanguard Investor Target Retirement Fund expense ratio before the mergers: 0.15%. All Vanguard Target Retirement Fund expense ratios after the mergers: 0.08%.
**Vanguard is investor-owned, meaning the fund shareholders own the funds, which in turn own Vanguard.
***Vanguard Target Retirement Funds average expense ratio as of December 31, 2021: 0.11%. Vanguard Target Retirement Funds expense ratio as of February 14, 2022: 0.08%. Industry average expense ratio for comparable target-date funds as of December 31, 2021: 0.49%. All averages are asset-weighted. Industry average excludes Vanguard. Sources: Vanguard and Morningstar.
†Forbes Advisor, The Best Target Date Funds for Retirement, 2022.
††Sources: Vanguard and Morningstar, Inc. Our Target Retirement Funds with a 10-year track record or longer (2055 and earlier vintages in Investor Shares), on average, ranked in the top 25% among peer groups for 10-year returns through mid-2021. Vanguard Target Retirement Income Fund ranked 19% out of 111 peers; 2015 Fund, 57% out of 69; 2020 Fund, 16% out of 97; 2025 Fund, 15% out of 131; 2030 Fund, 21% out of 124; 2035 Fund, 27% out of 126; 2040 Fund, 28% out of 124; 2045 Fund, 18% out of 125; 2050 Fund, 19% out of 122; and 2055 Fund, 28% out of 84. The average ranking among the funds was 24.8%. Only competing funds with a 10-year history were included. Results will vary in other time periods. There may be other material differences between products that must be considered before investing. Note that the competitive performance data shown represent past performance, which is not a guarantee of future results, and that all investments are subject to risks. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited. See the most recent performance.
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All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income.
For more information about Vanguard funds, visit investor.vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the work force. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. The Income Fund has a fixed investment allocation and is designed for investors who are already retired. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date.
Vanguard is responsible only for selecting the underlying funds and periodically rebalancing the holdings of target-date investments. The asset allocations Vanguard has selected for the Target Retirement Funds are based on our investment experience and are geared to the average investor. Regularly check the asset mix of the option you choose to ensure it is appropriate for your current situation.