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It’s not an exaggeration to say that Vanguard has changed retirement saving and investing as we know it.

Under visionary founder Jack Bogle, Vanguard created the concept (and the product) of the low-cost index fund. It then produced scores more of these cost-efficient under its own roof, spurring the competition to follow suit with their own rival products—driving down overall costs for investors.

The company continues that legacy today via its ever expanding suite of Vanguard mutual funds, and today, I want to highlight the best Vanguard retirement funds within that suite. Specifically, I’ll introduce you to seven of these retirement-focused mutual funds (and where applicable, their ETF counterparts), which are competitive on price, and popular choices in American 401(k) and IRA plans.

 

Disclaimer: This article does not constitute individualized investment advice. These securities appear for your consideration and not as personalized investment recommendations. Act at your own discretion.

What Should You Want in a Retirement Fund?


When you start investing your retirement savings, you need to consider a few critical factors.

First, a robust retirement portfolio should provide diversification across multiple asset classes—stocks and bonds at the very least, as well as possibly real estate and commodities, all of which you can typically get through mutual funds and ETFs. Diversifying your retirement portfolio across these asset classes helps spread risk and smooth your returns.

Second, you should keep an eye on costs. Every dollar spent on fees and expenses is a dollar no longer available to grow and compound over time, so keeping expenses cut to the bone is vital. And that’s exactly why Vanguard is so popular: The best Vanguard retirement funds will generally have some of the lowest fees and expenses in the business.

And finally, you ideally want your retirement portfolio to produce regular income—in the form of both bond interest and dividend income. Stock prices can suffer during nasty corrections and bear markets, but income-generating funds can help provide for your living expenses without forcing you to sell at an inopportune time.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested’s free retirement planning newsletter.

Why Vanguard Mutual Funds?


Vanguard Group is a leader in index mutual funds. Vanguard founder Jack Bogle launched the first Vanguard index fund for U.S. retail investors—the Vanguard First Index Investment Trust, which is now the Vanguard 500 Index Fund Admiral Shares (VFIAX)—in 1976, and in the four-and-a-half decades that have followed, Vanguard Funds have grown to become the dominant force in index investing.

As I mentioned above, one of the primary reasons behind its success is Vanguard’s dirt-cheap expenses. The average asset-weighted expense ratio for U.S. mutual funds and ETFs is 0.44%, or $4.40 annually for every $1,000 invested. Vanguard’s average, across 400-plus funds, is a scant 0.08%, or a mere 80¢ annually per $1,000 invested. That’s an astoundingly low number—one that means even when a Vanguard fund isn’t the absolute cheapest in its category, it’s still going to be one of your cheapest options.

And Vanguard index funds cover every conceivable pocket of the investable universe, including individual sector funds and emerging markets.

Vanguard grew into the powerhouse mutual fund company it is today by taking care of its clients and genuinely looking after their interests. Vanguard funds really started and continue to accelerate the trend of fee compression. But it’s not only the best Vanguard retirement funds that benefit. We all collectively pay less in fees and expenses and enjoy better returns because of the index revolution started and led by Vanguard’s founder Jack Bogle.

Related: The Best ETFs to Buy for a Prosperous 2025

The Best Vanguard Retirement Funds for 2025


With all that out of the way, let’s dig into some of the best Vanguard retirement funds to consider diving into this year.

Best Vanguard Retirement Fund #1: Vanguard 500 Index Fund Admiral Shares


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  • Style: U.S. large-cap stock
  • Management: Index
  • Assets under management: $1.4 trillion*
  • Dividend yield: 1.2%
  • Expense ratio: 0.04%, or 40¢ per year for every $1,000 invested
  • Minimum initial investment: $3,000

It’s difficult to beat a low-cost S&P 500 index fund for solid, long-term growth.

That’s not just empty praise. The majority of fund managers who run large-cap funds (funds that invest in larger companies) literally fail to consistently beat the S&P 500 Index, particularly after fees. According to S&P Dow Jones Indices, through mid-year 2024, “57% of all active large-cap U.S. equity funds underperformed the S&P 500.” That’s no anomaly: A majority of active managers have now failed to beat the S&P 500 in 21 of the past 24 years.

So if you can’t beat it, join it.

The Vanguard 500 Index Fund Admiral Shares (VFIAX) is Vanguard’s oldest index strategy, and it remains one of the very best Vanguard retirement funds. It’s insanely popular, too, boasting roughly $1.4 trillion in assets under management across its various share classes—a scale that allows it to offer a skinflint expense ratio of just 0.04%. That’s not free, but it’s awfully close.

To be included in this index, a company must have a market capitalization of at least $20.5 billion (up from $18 billion after a 2025 rule change), its shares must be highly liquid (shares are frequently bought and sold), and at least 50% of its outstanding shares must be available for public trading, among other criteria. A company must also have positive earnings in the most recent quarter, and the sum of its previous four quarters must be positive—two traits that weed out at least a few massive firms that would otherwise be included.

In case you’re wondering: If a company is already an S&P 500 component, but then it suddenly fails to meet some or all of the criteria, it’s not automatically kicked out of the index. But the selection committee could take this under consideration and possibly boot the company.

Turnover (how much the fund tends to buy and sell holdings) tends to be very low, as only a handful of stocks enter or leave the index in any given year. This makes VFIAX an extremely tax-efficient option for taxable accounts. 

If the $3,000 minimum is a problem, the exact same strategy is available via the Vanguard S&P 500 ETF (VOO), which charges an even cheaper 0.03% in annual expenses. At time of writing, a single share can be purchased for around $560.

* Many Vanguard funds have multiple share classes, including ETFs. Listed net assets for Vanguard funds in this story refer to assets under management across all of a given fund’s share classes.

Want to learn more about VFIAX? Check out the Vanguard provider site.

Related: 13 Best Long-Term Stocks to Buy and Hold Forever

Best Vanguard Retirement Fund #2: Vanguard Primecap Fund Investor Shares


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  • Style: U.S. large-cap stock
  • Management: Active
  • Assets under management: $74.5 billion
  • Dividend yield: 0.9%
  • Expense ratio: 0.38%, or $3.80 per year for every $1,000 invested
  • Minimum initial investment: $3,000

Vanguard Primecap Fund Investor Shares (VPMCX) has long been one of the most popular Vanguard funds in 401(k) plans. The problem? For years, new investors have been shut out of the fund, and existing investors were limited in how much more they could buy.

But in a touch of irony, this actively managed large-cap fund—which prioritizes out-of-favor companies—has itself fallen out of favor of late. Vanguard has reopened the fund to new investment as a result, and that could present fund buyers with the same opportunity that management sees in its stock picks.

“[VPMCX] is one of six impressive multimanager offerings that look unlike any index or actively managed rival,” says Robby Greengold, an analyst with Morningstar, which gives VPMCX a Gold Medalist rating. “Rather than showcase stocks that have trounced the broad market, as several of today’s biggest companies have in recent years, Primecap’s investment team often pursues out-of-favor companies with brighter prospects than the market recognizes. It invests meaningfully in value stocks, as typically defined by their below-market P/E multiples, dividend yields, and growth rates.”

VPMCX has been advised by Primecap Management Company since its inception in 1984, and for years, it was one of Vanguard’s hottest products. Indeed, the fund grew so large that management felt it couldn’t use additional assets as effectively, and Vanguard was forced to close the fund to new investors in 2004, limiting existing shareholders to $25,000 in additional purchases per year. (It did the same with its sister fund, Vanguard Primecap Core (VPCCX), in 2009).

Both funds reopened in 2024, however, amid a flight in assets. Some of its preferences failed to pan out across the short- and medium-term—heavy investments in airlines and cruise lines at the start of the pandemic, and picking some of the semiconductor industry’s more moderate winners, led to pretty middling results.

So, why buy VPMCX? Its management team focuses on the very long term, and Primecap as a whole is happy to absorb shorter-term hits in the name of superior long-term returns. And on that front, Primecap delivers. Says Greengold: “The strategy’s long-term investors have done well. Over the past decade, the fund has far outpaced the broad market and the typical actively managed rival.”

Exceedingly low turnover of 4% (it trades 4 of every 100 holdings in a given year) makes Primecap a pretty tax-friendly option, too.

Want to learn more about VPMCX? Check out the Vanguard provider site.

Related: 15 Best Investing Research & Stock Analysis Websites

Best Vanguard Retirement Fund #3: Vanguard Total Bond Market Index Fund Admiral Shares


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  • Style: U.S. intermediate-term core bond
  • Management: Index
  • Assets under management: $342.4 billion
  • SEC yield: 4.6%*
  • Expense ratio: 0.05%, or 50¢ per year for every $1,000 invested
  • Minimum initial investment: $3,000

No retirement asset allocation is complete without bond funds. As an asset class, bond funds play an important role in lowering volatility and providing regular income.

And within the world of Vanguard bond funds, the Vanguard Total Bond Market Index Fund Admiral Shares (VBTLX) stands out as one of the very best Vanguard retirement funds for its combination of competitive yield and rock-bottom fees and expenses. With an expense ratio of just 0.05%, it’s all but free to own. No wonder, then, that VBTLX has racked up a massive $340 billion in assets across all of its share classes.

The Vanguard Total Bond Market Index Fund provides broad exposure to the universe of bonds. A little less than half of its portfolio is Treasury or agency debt backed by the U.S. government, and another 20% is invested in government mortgage-backed securities (MBSes). Industrial-sector corporate bonds make up a little over 15%, banks and financial institutions make up 9%, and the rest is spread across foreign bonds, utilities, and commercial mortgage-backed securities (CMBSes).

One of the most critical metrics to consider when considering bond funds is duration, which is a measure of interest-rate sensitivity. As an example, a bond with a duration of two years would see its price rise by 2% if interest rates fell by 1% (or conversely, would see its price fall by 2% if interest rates rose by 1%). The actual calculation of duration is fairly complex; it’s the weighted average of the bond’s cash flows. But the key takeaway is that, all else equal, the longer a bond’s time to maturity, the higher its duration—and thus the higher the interest-rate risk.

The Vanguard Total Bond Market Index Fund, with a duration of 5.9 years, has a medium-term duration. That’s moderate interest-rate risk—if rates keep falling, VBTLX could struggle. But if the Federal Reserve largely stays put, investors will collect a 4%-plus yield with little issue.

If the $3,000 minimum is a problem, the exact same strategy is available via the Vanguard Total Bond Market ETF (BND), which charges an even cheaper 0.03% in annual expenses. At time of writing, a single share can be purchased for around $72.

* SEC yield reflects the interest earned across the most recent 30-day period. This is a standard measure for funds holding bonds and preferred stocks.

Want to learn more about VBTLX? Check out the Vanguard provider site.

 

Related: 11 Best Fidelity Funds to Buy

Best Vanguard Retirement Fund #4: Vanguard Federal Money Market Fund


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  • Style: Money market
  • Management: Active
  • Assets under management: $333.4 billion
  • SEC yield: 4.2%
  • Expense ratio: 0.11%, or $1.10 per year for every $1,000 invested
  • Minimum initial investment: $3,000

In the current environment, it seems unlikely that interest rates will go higher, but it’s possible—and if that happens, higher-duration bond funds would experience capital losses. That was certainly the case in 2022, when very long-term bonds actually saw greater declines than common stock indexes like the S&P 500.

If you are looking for a competitive yield with essentially no duration or interest rate risk at all, the Vanguard Federal Money Market Fund (VMFXX) is a solid option and one of the very best Vanguard retirement funds at today’s prices. This income fund consists entirely of U.S. Treasury bills and other U.S. government obligations and repurchase agreements. 

Money market funds are somewhat unique among mutual funds in that they specifically target a net asset value of $1 per share. Any earnings that cause the net asset value to go higher than $1 get distributed as dividends. This means that, unless you reinvest your dividends, the value of your money market mutual fund will not grow over time. And that makes VMFXX an extremely conservative option with extremely limited possibility of loss.

Money market funds’ yields are very sensitive to Federal Reserve policy moves, though. It was barely three years ago that money market funds in general offered virtually nothing in yield. But after the most aggressive string of rate hikes in history, VMFXX is a legitimate income fund with a yield above 4%.

VMFXX’s yield has started to decline alongside the Federal Reserve’s reduction in its benchmark interest rate. If the Fed became aggressive about cutting further, you might want to re-evaluate your options. But until then, the Vanguard Federal Money Market Fund remains one of the very best Vanguard retirement funds for its low risk and competitive yield.

Want to learn more about VMFXX? Check out the Vanguard provider site.

Related: The 10 Best Vanguard ETFs to Buy [Build a Low-Cost Portfolio]

Best Vanguard Retirement Fund #5: Vanguard Dividend Appreciation Index Fund Admiral Shares


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  • Style: U.S. dividend-growth stock
  • Management: Index
  • Assets under management: $103.0 billion
  • Dividend yield: 1.7%
  • Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested
  • Minimum initial investment: $3,000

A vital rule of investment funds: Always “look under the hood.”

It’d be easy to read the name Vanguard Dividend Appreciation Index Fund Admiral Shares (VDADX), note the inclusion of the word “dividend” and assume that you’ll be enjoying a significantly high level of dividend income. And you’d even be technically be correct—VDADX at least produces a little more income than the S&P 500. But this is not an income-first fund, and it’s certainly not a high-yield fund. 

That said, VDADX is one of the very best Vanguard retirement funds precisely because high current income isn’t the point.

Vanguard Dividend Appreciation Index Fund tracks the performance of the S&P U.S. Dividend Growers Index, which is made up of U.S. companies that have increased their dividend payout every year for at least 10 consecutive years. As an additional filter, the index excludes the top 25% highest-yielding eligible companies from the index, as exceptionally high-yielding stocks are often at risk for dividend cuts.

There is no better sign of company health than a long history of rising dividends. As the old Wall Street maxim goes: The safest dividend is the one that was just raised. Company boards only raise the dividend when they are confident they will have the cash to back it up.

As a general rule, you want diversified funds in a retirement portfolio, and VDADX certainly fits that bill. Technology, financials and health care are its three largest sector allocations at 26%, 22%, and 14%, respectively.

If the $3,000 minimum is a stretch on your budget, the same strategy is available via the Vanguard Dividend Appreciation ETF (VIG), which charges 0.06% in annual expenses and trades for around $183 per share.

Want to learn more about VDADX? Check out the Vanguard provider site.

Do you want to get serious about saving and planning for retirement? Sign up for Retire With Riley, Young and the Invested’s free retirement planning newsletter.

Related: 10 Best Dividend Stocks to Buy

Best Vanguard Retirement Fund #6: Vanguard Wellington Fund Investor Shares


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  • Style: Moderate allocation
  • Management: Active
  • Assets under management: $112.3 billion
  • Dividend yield: 2.1%
  • Expense ratio: 0.26%, or $2.60 per year for every $1,000 invested
  • Minimum initial investment: $3,000

Vanguard’s oldest mutual fund, Vanguard Wellington Fund Investor Shares (VWELX) is a “portfolio in a can.”

While stock funds allow you to hold hundreds or thousands of individual stocks, and bond funds allow you to hold hundreds or thousands of bonds, “balanced” or “allocation” funds like VWELX allow you to get all of that exposure in just one fund.

Vanguard Wellington, which came to life in 1929, is a moderate allocation fund that invests roughly two-thirds of its assets in stocks, and the other third in bonds. The stock portion of the portfolio currently holds about 70 predominantly large-cap stocks with a median market cap of over $250 billion—a “who’s who” of mega-cap blue-chip firms such as Apple (AAPL) and Microsoft (MSFT), with a little exposure to international names such as Unilever (UL) and AstraZeneca (AZN).

The bond portfolio is much more broadly diversified, at nearly 1,400 investment-grade issues. The majority of that (roughly two-thirds) is invested in corporate bonds, with another 22% in Treasuries and agency bonds, and the rest peppered across mortgage-backed securities (MBSes), foreign sovereign bonds, and other debt.

Vanguard Wellington, as the name suggests, is managed by Wellington Management, an investment management company with nearly a century of operational experience. And this one-stop shop for your large-cap stock and bond needs charges just 0.26% in annual expenses—very inexpensive for the skilled management and strong performance track record you’re getting in return. 

Just make sure you’re considering your own investment needs with this fund. If you don’t want a third of your portfolio to be in bonds, you’ll want to put additional money into individual stocks, equity funds, and/or alternative investments.

Wellington has a fair bit of turnover (39%) and generates a decent chunk of interest income from its bond portfolio. So, if you’re going to invest in VWELX, it makes sense to do so in a tax-advantaged account.

Want to learn more about VWELX? Check out the Vanguard provider site.

Related: 10 Monthly Dividend Stocks for Frequent, Regular Income

Best Vanguard Retirement Fund #7: Vanguard Target Retirement Funds


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  • Style: Target-date
  • Management: Active or index, depending on series
  • Expense ratio: 0.08%, or 80¢ per year for every $1,000 invested
  • Minimum initial investment: $1,000

One of the challenges in retirement planning is getting the asset allocation right, or having an asset class mix that is appropriate for an investor at your age and stage of life. An ideal portfolio for a 20-year-old is likely going to be very different from that of a 40-year-old, and both those portfolios will be different from what’s ideal for a 60-year-old.

This is where Vanguard Target Retirement Funds can really add value. 

Target-date funds—also called life-cycle funds—are a type of mutual fund that are designed to change their asset allocation over time. Target-date funds start out invested heavily in stocks, then slowly reduce their stock exposure and replace it with bond exposure as they approach their target retirement date, following a glide path.

The target retirement dates are intended to be estimates; they don’t have to be super precise. Generally, most mutual fund families will create target-date funds in five-year increments (say, 2025, 2030, 2035, etc.).

Vanguard Target Retirement Funds hold varying blends of both U.S. and international stocks of various sizes, as well as U.S. and international bonds. They’re unsurprisingly dirt-cheap, at just 0.08% annually, and the entire series earns a respectable Silver Medalist rating from Morningstar.

Want to learn more about Vanguard Target Retirement Funds? Check out the Vanguard provider site.

Related: The 9 Best Fidelity Index Funds You Can Own

Learn More About These and Other Funds With Morningstar Investor


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If you’re buying a fund you plan on holding for years (if not forever), you want to know you’re making the right selection. And Morningstar Investor can help you do that.

Morningstar Investor provides a wealth of information and comparable data points about mutual funds and ETFs—fees, risk, portfolio composition, performance, distributions, and more. Morningstar experts also provide detailed explanations and analysis of many of the funds the site covers.

With Morningstar Investor, you’ll enjoy a wealth of features, including Morningstar Portfolio X-Ray®, stock and fund watchlists, news and commentary, screeners, and more. And you can try it before you buy it. Right now, Morningstar Investor is offering a free seven-day trial. You can check out the current deal, as well as discounted rates for students and teachers, in our details box below.

Related: 7 Best High-Dividend ETFs for Income-Minded Investors

Vanguard Funds for Retirement: Frequently Asked Questions (FAQs)


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What is the minimum investment amount on Vanguard mutual funds?

Vanguard funds are known for being shareholder-friendly. The Vanguard mutual fund company blazed new trails with the index fund, and Vanguard has done more than any other investment firm to keep costs to a minimum for investors.

But there is one hitch. Many of Vanguard’s cheapest funds in terms of fees have initial investment minimums of around $3,000.

If that is a problem for you, don’t sweat it. Most popular Vanguard index funds are also available as ETFs. Most brokers will allow you to buy as little as one share, and some even allow for fractional shares. And if you use a commission-free brokerage, you can buy those ETFs without incurring additional fees. ETF prices vary, of course, but many cost less than $100, and they rarely exceed $400 per share.

Related: What Is a Roth Conversion? [A Tax-Smart Retirement Strategy]

Why does a fund’s expense ratio matter so much?

Every dollar you pay in expenses is a dollar that comes directly out of your returns. So, it is absolutely in your best interests to keep your expense ratios to an absolute minimum.

The expense ratio is the percentage of your investment lost each year to management fees, trading expenses and other fund expenses. Because index funds are passively managed and don’t have large staffs of portfolio managers and analysts to pay, they tend to have some of the lowest expense ratios of all mutual funds.

This matters because every dollar not lost to expenses is a dollar that is available to grow and compound. And over an investing lifetime, even a half a percent can have a huge impact. If you invest just $1,000 in a fund generating 5% per year after fees, over a 30-year horizon, it will grow to $4,116. However, if you invested $1,000 in the same fund, but it had an additional 50 basis points in fees (so it only generated 4.5% per year in returns), it would grow to only $3,584 over the same period.

Related: Direct Indexing: A (Tax-)Smarter Way to Index Your Investments

 

Charles Lewis Sizemore, CFA is the Chief Investment Officer of Sizemore Capital Management LLC, a registered investment adviser based in Dallas, Texas, where he specializes in dividend-focused portfolios and in building tax-efficient alternative allocations with minimal correlation to the stock market. He is also a Portfolio Manager of the Blue Orbit Capital Fund I, LP and the Blue Orbit Multi-Strategy Fund, LP.

Charles is a frequent guest on CNBC, Bloomberg TV, and Fox Business News, has been quoted in Barron’s, The Wall Street Journal, and The Washington Post, and is a frequent contributor to Forbes, GuruFocus, MarketWatch, and InvestorPlace.com.

He holds a master’s degree in Finance and Accounting from the London School of Economics in the United Kingdom and a Bachelor of Business Administration in Finance with an International Emphasis from Texas Christian University in Fort Worth, Texas, where he graduated Magna Cum Laude and as a Phi Beta Kappa scholar. Charles is a CFA Charterholder in good standing.

Charles lives with his wife Maria Jose, his sons Charles and Ian, and his daughter Gabriela and enjoys regularly traveling to his wife’s native Peru.