News release

Vanguard to Lower Investor Costs by an Estimated $190 Million through Enhancements to its Target Retirement Series

Firm to Merge Funds and Launch New Trust with Higher Equity Allocation for Retirees

VALLEY FORGE, PA (September 28, 2021)—Vanguard today announced continued efforts to meet the evolving needs of retirement savers, retirees, and plan sponsors by lowering costs, streamlining investment options, and enhancing its industry-leading target-date offer.1 The firm will consolidate its lineup with the planned mergers of Vanguard Institutional Target Retirement Funds into Vanguard Target Retirement Funds (TRFs), which is expected to result in a lower expense ratio of 0.08% (8 basis points) for each TRF following completion of the mergers. Vanguard will also deliver additional cost savings to its 401(k) clients by lowering the minimum investment requirement for Vanguard Target Retirement Trust II program to $100 million from $250 million. In addition, Vanguard will launch a new retirement income solution, Vanguard Target Retirement Income and Growth Trust for each of its Target Retirement Trust programs. The new trust’s higher (50%) equity allocation in retirement is intended for participants whose wealth, risk tolerance, and/or additional sources of income allow for higher discretionary spending in retirement.

“Vanguard will continue to innovate for clients, and our unique client-owned structure allows us to share our success with clients through lower fees,” said Tim Buckley, Vanguard Chairman and CEO.2 “Through these changes, Vanguard continues to expand access to low-cost, diversified target-date solutions that help more investors achieve a financially secure retirement.”

The TRF mergers are expected to be completed in February 2022. The merged funds will retain the same investment strategy, asset allocations, and glide path, informed by more than four decades of client insights and investment management expertise. With an anticipated expense ratio of 0.08%, investors will have access to a sophisticated, diversified asset allocation solution at just one-fifth of the average industry costs.3 In addition to standardized expense ratios across TRF vintages, the mergers are also expected to realize additional portfolio management and operational efficiencies, as well as economies of scale, which may result in additional cost savings for investors over time.

Effective immediately, Vanguard Target Retirement Trust II will have a new lower $100 million minimum, allowing plan sponsors and their employees to access even lower-cost target-date options. Since its founding in 1975, Vanguard has returned value to shareholders by lowering expense ratios and investment minimums more than 2,000 times across asset classes, product types, and strategies. In the last year, Vanguard reduced costs by 5-10% across its Target Retirement Trust (TRT) lineup and implemented portfolio management policies intended to reduce TRF and TRT transaction costs. The latest updates to Vanguard’s target-date lineup are estimated to deliver $190 million in aggregate savings to retirement savers in 2022.4

Continued Retirement Innovation

Vanguard is also adding to its retirement income solutions with Vanguard Target Retirement Income and Growth Trust, available to eligible defined contribution plans. The new trust’s higher (50%) equity allocation in retirement is intended for participants whose wealth, risk tolerance, and/or additional sources of income allow for higher discretionary spending in retirement. The new trust is designed to be an opt-in alternative to the lower equity allocation (30%) of Vanguard Target Retirement Income Trust— most appropriate for participants whose primary investment objective is stable inflation-adjusted income to cover basic living expenses. As participants approach age 65, they will be provided with tools and guidance to help them determine which trust option best suits their needs. Vanguard’s expanded retirement income capabilities will enable more participants to remain in their 401(k) plan upon retirement and continue to benefit from institutional pricing and fiduciary oversight.

“For more than two decades, Vanguard’s Target Retirement lineup has enhanced the future financial security of investors by providing sophisticated asset allocation and a disciplined, long-term strategy in an all-in-one fund offering,” said John James, managing director and head of Vanguard Institutional Investor Group. “Our new retirement income offer underscores our deep partnership with sponsors, who are increasingly seeking additional tools to guide their participants’ financial well-being into and beyond retirement.”

As the industry’s largest defined contribution asset manager, Vanguard leverages its expertise, experience, and skills to deliver world-class retirement solutions for plan sponsors and their participants.5 Vanguard recently launched its innovative advice programs—Vanguard Digital Advisor and Personal Advisor Services—within DC plans. In addition, this year, the firm debuted a modernized online plan participant experience designed to help ease decision making, boost savings rates, and improve participants’ chances for a secure retirement.

Investments in Target Retirement Funds and Trusts are subject to the risks of their underlying funds. The year in the fund or trust name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund or trust will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. Vanguard Target Retirement Income Fund and Trust and Vanguard Target Retirement Income and Growth Trust have fixed investment allocations and are designed for investors who are already retired. An investment in a Target Retirement Fund or Trust is not guaranteed at any time, including on or after the target date.


About Vanguard

Vanguard is one of the world’s largest investment management companies. As of August 31, 2021, Vanguard managed $8.3 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 417 funds to its more than 30 million investors worldwide. For more information, visit

All figures as of August 31, 2021 unless stated otherwise.

For more information about Vanguard funds, visit 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.

All investing is subject to risk, including the possible loss of the money you invest.

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. Diversification does not ensure a profit or protect against a loss.

Vanguard Target Retirement Trusts are not mutual funds. They are collective trusts available only to tax-qualified plans and their eligible participants. Investment objectives, risks, charges, expenses, and other important information should be considered carefully before investing. The collective trust mandates are managed by Vanguard Fiduciary Trust Company, a wholly owned subsidiary of The Vanguard Group, Inc. 

Vanguard Digital Advisor’s services are provided by Vanguard Advisers, Inc., a federally registered investment advisor. Go to for important details about this service. Vanguard Digital Advisor’s financial planning tools provide projections and goal achievement forecasts that are hypothetical in nature. They are provided for educational purposes only and are not guarantees of future results. 

Vanguard Personal Advisor Services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company. The services provided to clients who elect to receive ongoing advice will vary based upon the amount of assets in a portfolio. Please review the Vanguard Personal Advisor Services Brochure for an overview of the service. 

VAI is a subsidiary of VGI and an affiliate of VMC. Neither VAI nor its affiliates guarantee profits or protection from losses. 

Vanguard Marketing Corporation, Distributor.


1 Vanguard and Morningstar, as of June 30, 2021. Vanguard is the largest TDF manager in the industry.

2 Vanguard is client-owned, meaning the fund shareholders own the funds, which in turn own Vanguard. 

3 Morningstar, as of December 31, 2020

4 Estimated savings is inclusive of expected savings realized by Target Retirement Trust minimum investment reduction to $100 million from $250 million and anticipated expense ratio reduction of Target Retirement Funds to 0.08% (8 basis points). Expense ratio savings reflects difference between prior and current expense ratios multiplied by average AUM. Average AUM is based on daily average assets during a month, which are then averaged over the 12-months of the fiscal year.

5 Pensions & Investments, as of December 31, 2020