Investing in one of the 10 best Vanguard funds for retirees can be beneficial. They are generally high-performing, low-cost funds. But when deciding on the Vanguard portfolios for retirees, one must include the funds as part of the balanced portfolio, ensuring they meet their financial requirements. Also, remember that even the funds that usually rank among the top 10 Vanguard funds for retirees may not always guarantee success. So, research well to build rewarding portfolios.
VFIFX or Vanguard Target Retirement 2050 Fund
While there is never one fund for every investor, given that each individual has varying needs, a target-date fund, such as the VFIFX, may seem like an exception. VFIFX gets as close to retirement investments as it can get. It is designed to be the perfect one-fund solution for relaxed retirement investing. The fund modifies the bond and stock allocation over time. So, it gets more conservative as the target retirement date approaches. This implies that there is no need for the retiree to rebalance. It is one of the best Vanguard funds for seniors who live by the set-it-and-forget-it investment approach.
It is a target-date series comprising all the attributes one can seek from Vanguard’s solid investment culture. It comprises broadly diversified, low-cost index funds to gain ample global bonds and stock exposure.
Vanguard has a couple of target funds for retirees with target dates of 2070. Investors can prefer the fund that aligns with their anticipated retirement year. There is the VTINX or the Vanguard Target Retirement Income Fund for those already in retirement.
VFTNX or Vanguard FTSE Social Index Fund
It is one of the top 10 Vanguard funds for retirees who aspire to own investments that reflect their values. VFTNX is worth the look, as this fund tracks the FTSE4Good US Select Index. In addition, it holds mid and large-cap stocks that meet the governance, social, and environmental criteria.
Broadly, VFTNX steers clear of stocks in companies involved in natural gas, oil, coal, and more.
Further, they exclude stocks from companies that do not adhere to the human rights, labor, environment, and diversity guidelines.
The average annual return for VFTNX over the past decade is quite lucrative among the company’s large-cap blend funds, making it one of the best Vanguard funds for retirees.
VWIAX or Vanguard Wellesley Income Admiral Fund
Among the expert-recommended funds is the VWIAX. It is one of the top three Vanguard funds for retirement because it is balanced and focuses on income generation. In addition, the fund gives exposure to both investment-grade stocks and bonds.
Approximately 61 percent of its assets are in bonds, 36 percent are in stocks, and the remaining 3 percent are in short-term reserves.
It monitors the Wellesley Income Composite Index’s performance. Unsurprisingly, it has performed better than the benchmark. As of August 2024, the one-year return for this fund was 12.24 percent, while its 10-year return was 5.5 percent. In the same window, the index yielded 12.97 and 5.07 percent. This makes it one of the top Vanguard funds for retirement.
VWINX or Vanguard Wellesley Income Fund Investor Shares
VWINX has to be one of the best Vanguard funds for conservative retirees. It is ideal for someone seeking an income-focused, balanced strategy without investing the entire $50,000 in one instrument. The minimum investment requirement is $3000, and the expense ratio is 0.23 percent. Further, the assets under management are worth $51.5 billion.
Despite being one of the top Vanguard funds for conservative retirees, VWINX follows a similar asset distribution as its larger counterpart. The fund also monitors the Wellesley Income Composite Index. For one year, the benchmark yielded 12.97 percent, while the VWINX returned 12.19 percent. For a decade window, the benchmark returned 5.06 percent, whereas the VWINX fund yielded 5.42 percent returns.
VASGX or Vanguard LifeStrategy Growth Fund
The last one on the list of the best Vanguard index funds for retirees is the VASGX. The fund works differently from the target-date funds. They maintain a fixed allocation in perpetuity. This implies that with a change in the time horizon, the investor might want to switch to funds that do not adjust their risk for them.
For example, the Vanguard LifeStrategy Growth Fund allocates 20 percent in bonds and 80 percent in stocks. So, even though it is an aggressive fund, it is one of the best Vanguard funds for seniors who do not wish to withdraw their money for at least five years.
But an alternative for those who do not wish to wait that long is the VASIX or the Vanguard LifeStrategy Income Fund. It allocates 80 percent in bonds and 20 percent in stocks, making it one of the best Vanguard index funds for retirees about three to five years from their withdrawal date.