Mutual Funds

Vanguard Retirement Funds

September 18th, 2006  |  Published in Mutual Funds  |  2 Comments

Whether you’re in retirement or forty five years away from retirement, Vanguard has a retirement fund for you. Vanguard has been known as an excellent brokerage with fantastic funds because of their low fees (the only thing you can guarantee in the stock market, that Vanguard will take a smaller piece of your pie than the next guy) and when they introduced retirement funds a year or so ago, I knew I had to check these out.

Blueprint for Financial Prosperity did a writeup a year and a half ago about Vanguard Target Retirement Funds when they only had four, now Vanguard offers eleven Target Retirement funds.

They?re in the asset class titled ?Lifecycle? by Vanguard and several other brokerage houses have very similarly structured, lifecycle mutual funds (Fidelity has the Fidelity Freedom Funds if that rings a bell). The concept is as the target date draws closer, the fund will invest in increasingly stable investments that have higher yields. Vanguard recommends the lifecycle funds for those seeking ?an all-in-one retirement portfolio that automatically grows more conservative as their expected retirement date nears??

The most aggressive fund is the Vanguard Target Retirement 2050 Fund with nearly 95% of its holdings in a Vanguard stock market fund (Total Stock, European, Pacific and Emerging Markets)! The least aggressive is obviously the Vanguard Target Retirement Income Fund Summary which has about 45% in the Vanguard Total Bond Market Index Fund, some inflation protected funds and money market funds. Of course, as the years pass, the 2050 will become less and less aggressive, being replaced by Target Retirement 2055 and 2060 funds.