Best Vanguard Funds for Retirement
Best Vanguard Funds for Retirement
Vanguard differs greatly from most other asset managers and mutual fund companies. Organized as a mutual company, the firm is ultimately owned by the shareholders who invest in its funds. When you invest in Vanguard funds, you become a partner as well as a customer.
Vanguard's mission statement is: "To take a stand for all investors, to treat them fairly and to give them the best chance for investment success." The company's commitment to shareholders and its well-earned reputation for low fees and reasonable expenses make it especially well suited for long-term investing.
Here are seven of the best Vanguard funds to invest in for retirement:
VANGUARD FUND
Vanguard Target Retirement 2050 Fund (ticker: VFIFX)
Vanguard LifeStrategy Growth Fund (VASGX)
Vanguard Wellington Investor Shares (VWELX)
Vanguard Growth Index Fund Admiral Shares (VIGAX)
Vanguard Global Credit Bond Admiral (VGCIX)
Vanguard International Core Stock Fund Investor Shares (VWICX)
Vanguard Global ESG Select Stock Fund Investor Shares (VEIGX)
Vanguard's mission statement is: "To take a stand for all investors, to treat them fairly and to give them the best chance for investment success." The company's commitment to shareholders and its well-earned reputation for low fees and reasonable expenses make it especially well suited for long-term investing.
Here are seven of the best Vanguard funds to invest in for retirement:
VANGUARD FUND
Vanguard Target Retirement 2050 Fund (ticker: VFIFX)
Vanguard LifeStrategy Growth Fund (VASGX)
Vanguard Wellington Investor Shares (VWELX)
Vanguard Growth Index Fund Admiral Shares (VIGAX)
Vanguard Global Credit Bond Admiral (VGCIX)
Vanguard International Core Stock Fund Investor Shares (VWICX)
Vanguard Global ESG Select Stock Fund Investor Shares (VEIGX)
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Re: Best Vanguard Funds for Retirement
Vanguard Target Retirement 2050 Fund (VFIFX)
If you're looking for one fund to rule them all, there isn't one because every investor has unique needs. However, a target-date fund like VFIFX is about as close as retirement investors can get.
These funds are designed to be one-fund solutions for retirement investing. They adjust their allocation to stocks and bonds over time, growing more conservative as the target retirement date nears. This means you won't need to do this rebalancing yourself. It's the epitome of a set-it-and-forget-it investment strategy.
"This target-date series has all the features one would expect from Vanguard's deeply rooted investment culture," writes Jason Kephart, director of multi-asset ratings at Morningstar. "It features four low-cost, broadly diversified index funds to gain efficient exposure to global stocks and bonds."
Vanguard offers a dozen target retirement funds with target dates through 2070. Simply choose the fund that most closely aligns with your anticipated retirement year. Or, if you're already in retirement, opt for the Vanguard Target Retirement Income Fund (VTINX), which is designed for current retirees.
If you're looking for one fund to rule them all, there isn't one because every investor has unique needs. However, a target-date fund like VFIFX is about as close as retirement investors can get.
These funds are designed to be one-fund solutions for retirement investing. They adjust their allocation to stocks and bonds over time, growing more conservative as the target retirement date nears. This means you won't need to do this rebalancing yourself. It's the epitome of a set-it-and-forget-it investment strategy.
"This target-date series has all the features one would expect from Vanguard's deeply rooted investment culture," writes Jason Kephart, director of multi-asset ratings at Morningstar. "It features four low-cost, broadly diversified index funds to gain efficient exposure to global stocks and bonds."
Vanguard offers a dozen target retirement funds with target dates through 2070. Simply choose the fund that most closely aligns with your anticipated retirement year. Or, if you're already in retirement, opt for the Vanguard Target Retirement Income Fund (VTINX), which is designed for current retirees.
Re: Best Vanguard Funds for Retirement
Vanguard LifeStrategy Growth Fund (VASGX)
Another one-fund solution for retirement investors is Vanguard's LifeStrategy funds. Unlike the target-date fund listed above, the LifeStrategy funds are designed to maintain a fixed allocation in perpetuity. This means that as your time horizon changes, you may need to switch funds since they won't adjust their risk for you.
For instance, VASGX is about 80% stocks and 20% bonds. This makes it a fairly aggressive fund best used when you have more than five years until you want to withdraw your money.
If that's too long to wait, consider the Vanguard LifeStrategy Income Fund (VASIX). At 20% stocks and 80% bonds, it's designed for when you're three to five years away from withdrawal.
There's also a 40%-stock-to-60%-bond fund (VSCGX) and a 60%-stock-to-40%-bond fund (VSMGX) for more middle-of-the-road investors.
The LifeStrategy funds' "straightforward and efficient approach to delivering broad equity and fixed-income exposure should continue to serve investors well," writes Morningstar Analyst Ben Sater, lauding them as "inexpensive and consistent" options.
Another one-fund solution for retirement investors is Vanguard's LifeStrategy funds. Unlike the target-date fund listed above, the LifeStrategy funds are designed to maintain a fixed allocation in perpetuity. This means that as your time horizon changes, you may need to switch funds since they won't adjust their risk for you.
For instance, VASGX is about 80% stocks and 20% bonds. This makes it a fairly aggressive fund best used when you have more than five years until you want to withdraw your money.
If that's too long to wait, consider the Vanguard LifeStrategy Income Fund (VASIX). At 20% stocks and 80% bonds, it's designed for when you're three to five years away from withdrawal.
There's also a 40%-stock-to-60%-bond fund (VSCGX) and a 60%-stock-to-40%-bond fund (VSMGX) for more middle-of-the-road investors.
The LifeStrategy funds' "straightforward and efficient approach to delivering broad equity and fixed-income exposure should continue to serve investors well," writes Morningstar Analyst Ben Sater, lauding them as "inexpensive and consistent" options.
Re: Best Vanguard Funds for Retirement
Vanguard Wellington Investor Shares (VWELX)
Launched in 1929, VWELX is both the oldest and one of the best Vanguard funds for retirement. Like the LifeStrategy funds above, it combines both stocks and bonds into a single portfolio. Here you get about two-thirds stocks to one-third bonds. The fund invests across all economic sectors, further aiding in diversification.
"Experienced managers with deep resources oversee Vanguard Wellington’s exceptional process, which is grounded in bottom-up research," writes Morningstar Analyst Stephen Margaria. "Combined with low fees, this balanced fund continues to be a top choice for investors."
Morningstar awards the fund top marks with five stars and a gold badge. The research team gives gold badges to funds they have the highest conviction will outperform an index or peers over a market cycle.
You can get the same portfolio for even less with the Admiral shares version of the fund under ticker VWENX. There's a catch, however: In order to qualify for those lower fees you'll need to invest at least $50,000 to qualify.
Launched in 1929, VWELX is both the oldest and one of the best Vanguard funds for retirement. Like the LifeStrategy funds above, it combines both stocks and bonds into a single portfolio. Here you get about two-thirds stocks to one-third bonds. The fund invests across all economic sectors, further aiding in diversification.
"Experienced managers with deep resources oversee Vanguard Wellington’s exceptional process, which is grounded in bottom-up research," writes Morningstar Analyst Stephen Margaria. "Combined with low fees, this balanced fund continues to be a top choice for investors."
Morningstar awards the fund top marks with five stars and a gold badge. The research team gives gold badges to funds they have the highest conviction will outperform an index or peers over a market cycle.
You can get the same portfolio for even less with the Admiral shares version of the fund under ticker VWENX. There's a catch, however: In order to qualify for those lower fees you'll need to invest at least $50,000 to qualify.
Re: Best Vanguard Funds for Retirement
Vanguard Growth Index Fund Admiral Shares (VIGAX)
If you still have a long way to retirement, growth is the name of the game, and few have delivered on that front better than VIGAX.
It invests in big U.S. companies from sectors that tend to grow faster than the broader market. These sectors are primarily technology (57.5% of the portfolio) and consumer discretionary (20.5% of the portfolio).
"Market-cap weighting is an efficient way to size holdings because it harnesses the market's consensus opinion of each stock's relative value," writes Morningstar Analyst Zachary Evens. "Stocks that grow in size take up a larger share of the portfolio, while shrinking companies that may be struggling will have less importance."
The result is a portfolio dominated by many familiar names, including Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Nvidia Corp. (NVDA). These three alone represent nearly 33% of the portfolio.
The fund gained a whopping 46.8% in 2023 and nearly 33% in 2024. It boasts an average return of more than 15% in the past 10 years. However, that which rises fastest can also fall hardest. In 2022, the fund lost over 33%, so be prepared for a potentially rocky ride. But herein lies the lesson: Investors who sold in 2022 may have lost over 30%, but if you held on through 2023, you'd have enjoyed that impressive nearly 47% rebound.
If you still have a long way to retirement, growth is the name of the game, and few have delivered on that front better than VIGAX.
It invests in big U.S. companies from sectors that tend to grow faster than the broader market. These sectors are primarily technology (57.5% of the portfolio) and consumer discretionary (20.5% of the portfolio).
"Market-cap weighting is an efficient way to size holdings because it harnesses the market's consensus opinion of each stock's relative value," writes Morningstar Analyst Zachary Evens. "Stocks that grow in size take up a larger share of the portfolio, while shrinking companies that may be struggling will have less importance."
The result is a portfolio dominated by many familiar names, including Apple Inc. (AAPL), Microsoft Corp. (MSFT) and Nvidia Corp. (NVDA). These three alone represent nearly 33% of the portfolio.
The fund gained a whopping 46.8% in 2023 and nearly 33% in 2024. It boasts an average return of more than 15% in the past 10 years. However, that which rises fastest can also fall hardest. In 2022, the fund lost over 33%, so be prepared for a potentially rocky ride. But herein lies the lesson: Investors who sold in 2022 may have lost over 30%, but if you held on through 2023, you'd have enjoyed that impressive nearly 47% rebound.
Re: Best Vanguard Funds for Retirement
Vanguard Global Credit Bond Investor Shares (VGCIX)
Don't neglect fixed-income funds when constructing your retirement portfolio. The stability these funds offer can be key in preserving your capital. Not to mention, the regular income some offer can help provide a paycheck replacement in retirement. This is where funds like VGCIX come into play.
It's an actively managed fund, but still costs far less than the average corporate bond fund, charging an expense ratio of 0.35%. When uncertainty abounds, active management can be a smart move. Likewise, when your home country feels a bit unstable, adding international debt to your retirement portfolio can bring back a sense of stability and a reminder that the world will go on.
VGCIX holds nearly 1,500 bonds from six regions around the globe. Less than half of the portfolio is in North America, and nearly one-third is in Europe. The 30-day SEC yield of 4.4% will be a nice cushion to your portfolio, too.
If you're willing to invest $50,000 into the fund, you can also get a 0.1% discount on the expense ratio through the Admiral shares version of the fund, with the ticker VGCAX.
Don't neglect fixed-income funds when constructing your retirement portfolio. The stability these funds offer can be key in preserving your capital. Not to mention, the regular income some offer can help provide a paycheck replacement in retirement. This is where funds like VGCIX come into play.
It's an actively managed fund, but still costs far less than the average corporate bond fund, charging an expense ratio of 0.35%. When uncertainty abounds, active management can be a smart move. Likewise, when your home country feels a bit unstable, adding international debt to your retirement portfolio can bring back a sense of stability and a reminder that the world will go on.
VGCIX holds nearly 1,500 bonds from six regions around the globe. Less than half of the portfolio is in North America, and nearly one-third is in Europe. The 30-day SEC yield of 4.4% will be a nice cushion to your portfolio, too.
If you're willing to invest $50,000 into the fund, you can also get a 0.1% discount on the expense ratio through the Admiral shares version of the fund, with the ticker VGCAX.
Re: Best Vanguard Funds for Retirement
Vanguard International Core Stock Fund Investor Shares (VWICX)
There's often a tendency toward home country bias in retirement investing. It can be easier and more comfortable to invest in companies you recognize. But including international funds like VWICX in your portfolio will ensure you get to benefit from other nations' growth or stability, too.
VWICX invests in companies from developed and emerging markets across all sectors. The managers look for a mix of growth and value stocks to keep the overall portfolio balanced. It's predominantly invested in Europe at nearly 46% of the portfolio. The remaining half is almost evenly split between the Pacific and emerging markets, with about 6% in North America.
As an actively managed fund, it comes with a slightly higher expense ratio. However, it's still low for this type of fund, according to Morningstar. If you're able to put $50,000 into the fund, you can get a 0.1% discount with the fund's Admiral shares, which are sold under the ticker VZICX.
Morningstar gives VWICX top marks with five stars and a gold badge.
There's often a tendency toward home country bias in retirement investing. It can be easier and more comfortable to invest in companies you recognize. But including international funds like VWICX in your portfolio will ensure you get to benefit from other nations' growth or stability, too.
VWICX invests in companies from developed and emerging markets across all sectors. The managers look for a mix of growth and value stocks to keep the overall portfolio balanced. It's predominantly invested in Europe at nearly 46% of the portfolio. The remaining half is almost evenly split between the Pacific and emerging markets, with about 6% in North America.
As an actively managed fund, it comes with a slightly higher expense ratio. However, it's still low for this type of fund, according to Morningstar. If you're able to put $50,000 into the fund, you can get a 0.1% discount with the fund's Admiral shares, which are sold under the ticker VZICX.
Morningstar gives VWICX top marks with five stars and a gold badge.
Re: Best Vanguard Funds for Retirement
Vanguard Global ESG Select Stock Fund Investor Shares (VEIGX)
Socially conscious retirement investors can rejoice because Vanguard has some great offerings for you, such as the Vanguard Global ESG Select Stock Fund. This actively managed fund uses proprietary screening methods to find global mid- and large-cap stocks with leading environmental, social and governance (ESG) practices alongside strong financials.
"That process is sensible and has been executed very well," writes Morningstar Senior Analyst David Kathman. "The managers use quantitative screens to narrow down the investment universe before doing a fundamental deep dive on the most promising names."
ESG-focused companies often prioritize more sustainable and responsible business practices. This can make these investments lower risk since they'll have less exposure to adverse events like regulatory changes or environmental crises.
VEIGX maintains a "highly selective" portfolio of 35 to 45 stocks intended to be held for the long term. But don't let the small numbers fool you: It's still a well-diversified fund with exposure to 11 countries and no more than 5.7% in any one holding.
It's also available for a slightly lower expense ratio through the Admiral shares class as ticker VESGX.
Socially conscious retirement investors can rejoice because Vanguard has some great offerings for you, such as the Vanguard Global ESG Select Stock Fund. This actively managed fund uses proprietary screening methods to find global mid- and large-cap stocks with leading environmental, social and governance (ESG) practices alongside strong financials.
"That process is sensible and has been executed very well," writes Morningstar Senior Analyst David Kathman. "The managers use quantitative screens to narrow down the investment universe before doing a fundamental deep dive on the most promising names."
ESG-focused companies often prioritize more sustainable and responsible business practices. This can make these investments lower risk since they'll have less exposure to adverse events like regulatory changes or environmental crises.
VEIGX maintains a "highly selective" portfolio of 35 to 45 stocks intended to be held for the long term. But don't let the small numbers fool you: It's still a well-diversified fund with exposure to 11 countries and no more than 5.7% in any one holding.
It's also available for a slightly lower expense ratio through the Admiral shares class as ticker VESGX.