STRATEGY 1: ONE STEP INVESTING

The One-Step Choice offers a convenient solution if:

• You dont have the time or experience for investment research.
• You prefer to have your retirement investments professionally managed.

The One-Step Choice keeps things simple. You choose a single Vanguard Target Retirement fund to invest in. Its a convenient, low-maintenance way to have your retirement investments professionally managed for you.

Vanguard Target Retirement funds have names that match specific investment time horizons. So all you need to do is:

• Decide how many more years until you expect to retire.
• Then choose a Vanguard Target Retirement fund closest to your expected retirement year.

What is a Vanguard Target Retirement fund?

Vanguard Target Retirement funds invest in a mix of assets. Sometimes called target date funds, retirement funds, or age-based funds, they are designed and managed for investors who have a specific target retirement year in mind. The target date is an approximate date when investors may plan to begin withdrawing from the fund.

Vanguard Target Retirement funds invest in a mix of mutual funds including stocks, bonds and real estate investments. 1

How Do Vanguard Target Retirement funds Work?

In a Vanguard Target Retirement fund, the mix of assets changes over time to potentially maximize return and minimize risk as the target year approaches.

• Vanguard Target Retirement funds are adjusted periodically to maintain an asset allocation appropriate for the funds time horizon. 2
• Each Vanguard Target Retirement funds investments are adjusted from more aggressive to more conservative as a target retirement year approaches. 2

As with all mutual funds, the principal value isn’t guaranteed. Target-date mutual funds are actively managed, so the asset allocation is subject to change and may vary from that shown. Please note that the target date is an approximate date when investors may begin withdrawing from the fund. After the target date has been reached, the fund may be merged into a fund with a more stable asset allocation.

1 Diversification and reallocating/rebalancing cannot ensure a profit nor eliminate market risk and that the principal value of these funds is not guaranteed at any time. In addition to the fund level expenses, Vanguard Target Retirement funds are also subject to the expenses of their underlying investments.

2 Vanguard Target Retirement funds share the risks associated with the types of securities held by each of the underlying funds in which they invest, including market risk, company risk, foreign investment risks, interest-rate risk, credit risk, illiquid security risk, prepayment risk and extension risk. For a detailed discussion of risk, consult the prospectus.