What Is the Vanguard Target Retirement Income Fund?


Quick Answer

The Vanguard Target Retirement Income Fund is a plan intended for people who are already retired and want to build capital and income by investing in index funds, according to Vanguard. There are five Vanguard index funds used in this type of investment.

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Full Answer

These types of funds are as much at risk as other funds. This is because of the stability or the lack thereof of the underlying investment funds. Most of the funds can be started prior to retirement, but their focus changes after the target date. The target date is shown in the title of the fund and refers to the account holder's retirement date. Once that date is reached the fund will change from more aggressive funds to conservative funds, as stated by Vanguard.

As of October 2015, the fund puts 37.6 percent of the investment in the Vanguard Total Bond Market II Index Fund Investors Shares, 18.2 percent goes into the Vanguard Total Stock Market Index Fund, 16.7 percent in Vanguard Short-term Inflation-protected Securities Index Fund Investor Shares, 15.9 percent Vanguard Total International Bond Index Fund and 11.6 percent goes into the Vanguard Total International Stock. The fund has a minimum initial investment of $1000. This fund has no purchase or redemption fee. Account service fees can vary depending on the balance in the funds and how many a customer has.

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