Vanguard Target Retirement 2010 Fund - Americanfidelity

grade foreign bonds issued in currencies other than the U.S. dollar (but hedged byVanguard to minimize foreign currency exposure).The Fund’s indirect stock holdings are a diversified mix of U.S. and foreign large-, mid-,and small-capitalization stocks.Principal RisksThe Fund is subject to the risks associated with the stock and bond markets, any ofwhich could cause an investor to lose money. An investment in the Fund is notguaranteed. An investor may experience losses. There is no guarantee that the Fundwill provide adequate income through retirement. Because bonds and short-terminvestments usually are less volatile than stocks and because the Fund invests most ofits assets in bonds and short-term investments, the Fund’s overall level of risk shouldbe low to moderate. With approximately 70% of its assets allocated to bonds, the Fund is proportionatelysubject to the following bond risks: interest rate risk, which is the chance that bondprices will decline because of rising interest rates; income risk, which is the chancethat an underlying fund’s income will decline because of falling interest rates; creditrisk, which is the chance that a bond issuer will fail to pay interest or principal in atimely manner or that negative perceptions of the issuer’s ability to make suchpayments will cause the price of that bond to decline, thus reducing the underlyingfund’s return; and call risk, which is the chance that during periods of falling interestrates, issuers of callable bonds may call (redeem) securities with higher coupon ratesor interest rates before their maturity dates. An underlying fund would then lose anyprice appreciation above the bond’s call price and would be forced to reinvest theunanticipated proceeds at lower interest rates, resulting in a decline in the underlyingfund’s income. The Fund is also subject to the following risks associated withinvestments in currency-hedged foreign bonds: country/regional risk, which is thechance that world events—such as political upheaval, financial troubles, or naturaldisasters—will adversely affect the value and/or liquidity of securities issued by foreigngovernments, government agencies, or companies; and currency hedging risk, which isthe chance that the currency hedging transactions entered into by the underlyinginternational bond fund may not perfectly offset the fund’s foreign currency exposure. With approximately 30% of its assets allocated to stocks, the Fund isproportionately subject to stock market risk, which is the chance that stock pricesoverall will decline. Stock markets tend to move in cycles, with periods of rising pricesand periods of falling prices. The Fund is also subject to the following risks associatedwith investments in foreign stocks: country/regional risk, which is the chance thatworld events—such as political upheaval, financial troubles, or natural disasters—willadversely affect the value of companies in any one country or region; and currencyrisk, which is the chance that the value of a foreign investment, measured in U.S.3

dollars, will decrease because of unfavorable changes in currency exchange rates.Country/regional risk and currency risk are especially high in emerging markets. The Fund is also subject to asset allocation risk, which is the chance that theselection of underlying funds, and the allocation of assets to them, will cause theFund to underperform other funds with a similar investment objective.An investment in the Fund is not a deposit of a bank and is not insured or guaranteedby the Federal Deposit Insurance Corporation or any other government agency.Annual Total ReturnsThe following bar chart and table are intended to help you understand the risks ofinvesting in the Fund. The bar chart shows how the performance of the Fund has variedfrom one calendar year to another over the periods shown. The table shows how theaverage annual total returns of the Fund compare with those of relevant market indexesand a composite bond/stock index, which have investment characteristics similar tothose of the Fund. Keep in mind that the Fund’s past performance (before and aftertaxes) does not indicate how the Fund will perform in the future. Updated performanceinformation is available on our website at vanguard.com/performance or by callingVanguard toll-free at 800-662-7447.Annual Total Returns — Vanguard Target Retirement Income Fund Investor 93-40%During the periods shown in the bar chart, the highest return for a calendar quarterwas 7.44% (quarter ended September 30, 2009), and the lowest return for a quarterwas –5.47% (quarter ended December 31, 2008).4

Average Annual Total Returns for Periods Ended December 31, 20161 Year5 Years10 YearsVanguard Target Retirement Income Fund Investor SharesReturn Before Taxes5.25%4.91%4.88%Return After Taxes on Distributions4.424.013.91Return After Taxes on Distributions and Sale of Fund Shares3.163.553.522.65%2.23%4.34%Comparative Indexes(reflect no deduction for fees, expenses, or taxes)Bloomberg Barclays U.S. Aggregate Bond IndexMSCI US Broad Market IndexTarget Income Composite Index12.6714.717.265.355.104.94Actual after-tax returns depend on your tax situation and may differ from those shown inthe preceding table. When after-tax returns are calculated, it is assumed that theshareholder was in the highest individual federal marginal income tax bracket at the timeof each distribution of income or capital gains or upon redemption. State and localincome taxes are not reflected in the calculations. Please note that after-tax returns arenot relevant for a shareholder who holds fund shares in a tax-deferred account, such asan individual retirement account or a 401(k) plan. Also, figures captioned Return AfterTaxes on Distributions and Sale of Fund Shares may be higher than other figures for thesame period if a capital loss occurs upon redemption and results in an assumed taxdeduction for the shareholder.Investment AdvisorThe Vanguard Group, Inc. (Vanguard)Portfolio ManagersWilliam Coleman, CFA, Portfolio Manager at Vanguard. He has co-managed the Fundsince 2013.Walter Nejman, Portfolio Manager at Vanguard. He has co-managed the Fund since 2013.5

Purchase and Sale of Fund SharesYou may purchase or redeem shares online through our website (vanguard.com), bymail (The Vanguard Group, P.O. Box 1110, Valley Forge, PA 19482-1110), or bytelephone (800-662-2739). The minimum investment amount required to open andmaintain a Fund account for Investor Shares is 1,000. The minimum investmentamount required to add to an existing Fund account is generally 1. Institutional,financial intermediary, and Vanguard retail managed clients should contact Vanguardfor information on special eligibility rules that may apply to them regarding InvestorShares. If you are investing through an employer-sponsored retirement or savingsplan, your plan administrator or your benefits office can provide you with detailedinformation on how to participate in your plan.Tax InformationThe Fund’s distributions may be taxable as ordinary income or capital gain. If youare investing through a tax-advantaged account, such as an IRA or an employersponsored retirement or savings plan, special tax rules apply.Payments to Financial IntermediariesThe Fund and its investment advisor do not pay financial intermediaries for sales ofFund shares.6

Vanguard Target Retirement 2010 FundInvestment ObjectiveThe Fund seeks to provide capital appreciation and current income consistent with itscurrent asset allocation.Fees and ExpensesThe following table describes the fees and expenses you may pay if you buy and holdshares of the Fund.Shareholder Fees(Fees paid directly from your investment)Sales Charge (Load) Imposed on PurchasesNonePurchase FeeNoneSales Charge (Load) Imposed on Reinvested DividendsNoneRedemption FeeNoneAccount Service Fee (for certain fund account balances below 10,000) 20/yearAnnual Fund Operating Expenses(Expenses that you pay each year as a percentage of the value of your investment)Management FeesNone12b-1 Distribution FeeNoneOther ExpensesNoneAcquired Fund Fees and Expenses0.13%Total Annual Fund Operating Expenses0.13%7

ExampleThe following example is intended to help you compare the cost of investing in theFund (based on the fees and expenses of the acquired funds) with the cost ofinvesting in other mutual funds. It illustrates the hypothetical expenses that you wouldincur over various periods if you invested 10,000 in the Fund’s shares. This exampleassumes that the Fund provides a return of 5% each year and that total annual fundoperating expenses of the Fund and its underlying funds remain as stated in thepreceding table. You would incur these hypothetical expenses whether or not youredeem your investment at the end of the given period. Although your actual costsmay be higher or lower, based on these assumptions your costs would be:1 Year3 Years5 Years10 Years 13 42 73 166Portfolio TurnoverThe Fund may pay transaction costs, such as purchase fees, when it buys and sellssecurities (or “turns over” its portfolio). A higher portfolio turnover rate may indicatehigher transaction costs and may result in more taxes when Fund shares are held in ataxable account. These costs, which are not reflected in annual fund operatingexpenses or in the previous expense example, reduce the Fund’s performance. Duringthe most recent fiscal year, the Fund’s portfolio turnover rate was 8% of the averagevalue of its portfolio.Principal Investment StrategiesThe Fund invests in other Vanguard mutual funds according to an asset allocationstrategy designed for investors planning to retire and leave the workforce in or withina few years of 2010 (the target year). The Fund is designed for an investor who plansto withdraw the value of an account in the Fund over a period of many years after thetarget year. The Fund’s asset allocation will become more conservative over time,meaning that the percentage of assets allocated to stocks will decrease while thepercentage of assets allocated to bonds and other fixed income investments willincrease. Within seven years after 2010, the Fund’s asset allocation should becomesimilar to that of the Target Retirement Income Fund. As of September 30, 2016, theFund’s asset allocation among the underlying funds was as follows: Vanguard Total Bond Market II Index Fund36.4% Vanguard Total Stock Market Index Fund19.3% Vanguard Short-Term Inflation-Protected Securities Index Fund15.8% Vanguard Total International Bond Index Fund15.6% Vanguard Total International Stock Index Fund12.9%8

At any given time, the Fund’s asset allocation may be affected by a variety of factors, suchas whether the underlying funds are accepting additional investments.The Fund’s indirect bond holdings are a diversified mix of short-, intermediate-, andlong-term U.S. government, U.S. agency, and investment-grade U.S. corporate bonds;inflation-protected public obligations issued by the U.S. Treasury; mortgage-backedand asset-backed securities; and government, agency, corporate, and securitizedinvestment-grade foreign bonds issued in currencies other than the U.S. dollar (buthedged by Vanguard to minimize foreign currency exposure).The Fund’s indirect stock holdings are a diversified mix of U.S. and foreign large-, mid-,and small-capitalization stocks.Principal RisksThe Fund is subject to the risks associated with the stock and bond markets, any ofwhich could cause an investor to lose money. An investment in the Fund is notguaranteed. An investor may experience losses, including losses near, at, or after thetarget year. There is no guarantee that the Fund will provide adequate income at orafter the target year. Because fixed income securities such as bonds usually are lessvolatile than stocks and because the Fund currently invests a significant portion of itsassets in fixed income securities, the Fund’s overall level of risk should be lower thanthat of funds investing entirely in stocks. With approximately 68% of its assets allocated to bonds, the Fund isproportionately subject to the following bond risks: interest rate risk, which is thechance that bond prices will decline because of rising interest rates; income risk,which is the chance that an underlying fund’s income will decline because of fallinginterest rates; credit risk, which is the chance that a bond issuer will fail to payinterest or principal in a timely manner or that negative perceptions of the issuer’sability to make such payments will cause the price of that bond to decline, thusreducing the underlying fund’s return; and call risk, which is the chance that duringperiods of falling interest rates, issuers of callable bonds may call (redeem) securitieswith higher coupon rates or interest rates before their maturity dates. An underlyingfund would then lose any price appreciation above the bond’s call price and would beforced to reinvest the unanticipated proceeds at lower interest rates, resulting in adecline in the underlying fund’s income. The Fund is also subject to the following risksassociated with investments in currency-hedged foreign bonds: country/regional risk,which is the chance that world events—such as political upheaval, financial troubles,or natural disasters—will adversely affect the value and/or liquidity of securitiesissued by foreign governments, government agencies, or companies; and currencyhedging risk, which is the chance that the currency hedging transactions entered intoby the underlying international bond fund may not perfectly offset the fund’s foreigncurrency exposure.9

With approximately 32% of its assets allocated to stocks, the Fund isproportionately subject to stock market risk, which is the chance that stock pricesoverall will decline. Stock markets tend to move in cycles, with periods of rising pricesand periods of falling prices. The Fund is also subject to the following risks associatedwith investments in foreign stocks: country/regional risk, which is the chance thatworld events—such as political upheaval, financial troubles, or natural disasters—willadversely affect the value of companies in any one country or region; and currencyrisk, which is the chance that the value of a foreign investment, measured in U.S.dollars, will decrease because of unfavorable changes in currency exchange rates.Country/regional risk and currency risk are especially high in emerging markets. The Fund is also subject to asset allocation risk, which is the chance that theselection of underlying funds, and the allocation of assets to them, will cause theFund to underperform other funds with a similar investment objective.An investment in the Fund is not a deposit of a bank and is not insured or guaranteedby the Federal Deposit Insurance Corporation or any other government agency.Annual Total ReturnsThe following bar chart and table are intended to help you understand the risks ofinvesting in the Fund. The bar chart shows how the performance of the Fund has variedfrom one calendar year to another over the periods shown. The table shows how theaverage annual total returns of the Fund compare with those of relevant market indexesand a composite bond/stock index, which have investment characteristics similar tothose of the Fund. Keep in mind that the Fund’s past performance (before and aftertaxes) does not indicate how the Fund will perform in the future. Updated performanceinformation is available on our website at vanguard.com/performance or by callingVanguard toll-free at 800-662-7447.Annual Total Returns — Vanguard Target Retirement 2010 Fund Investor 0.67-40%During the periods shown in the bar chart, the highest return for a calendar quarterwas 10.55% (quarter ended June 30, 2009), and the lowest return for a quarter was–10.63% (quarter ended December 31, 2008).10

Average Annual Total Returns for Periods Ended December 31, 20161 Year5 Years10 YearsVanguard Target Retirement 2010 Fund Investor SharesReturn Before Taxes5.22%5.97%4.61%Return After Taxes on Distributions4.184.943.71Return After Taxes on Distributions and Sale of Fund Shares3.374.433.402.65%2.23%4.34%Comparative Indexes(reflect no deduction for fees, expenses, or taxes)Bloomberg Barclays U.S. Aggregate Bond IndexMSCI US Broad Market Index12.6714.717.26Target 2010 Composite Index5.446.164.67Actual after-tax returns depend on your tax situation and may differ from those shown inthe preceding table. When after-tax returns are calculated, it is assumed that theshareholder was in the highest individual federal marginal income tax bracket at the timeof each distribution of income or capital gains or upon redemption. State and localincome taxes are not reflected in the calculations. Please note that after-tax returns arenot relevant for a shareholder who holds fund shares in a tax-deferred account, such asan individual retirement account or a 401(k) plan. Also, figures captioned Return AfterTaxes on Distributions and Sale of Fund Shares may be higher than other figures for thesame period if a capital loss occurs upon redemption and results in an assumed taxdeduction for the shareholder.Investment AdvisorThe Vanguard Group, Inc. (Vanguard)Portfolio ManagersWilliam Coleman, CFA, Portfolio Manager at Vanguard. He has co-managed the Fundsince 2013.Walter Nejman, Portfolio Manager at Vanguard. He has co-managed the Fund since 2013.11

Purchase and Sale of Fund SharesYou may purchase or redeem shares online through our website (vanguard.com), bymail (The Vanguard Group, P.O. Box 1110, Valley Forge, PA 19482-1110), or bytelephone (800-662-2739). The minimum investment amount required to open andmaintain a Fund account for Investor Shares is 1,000. The minimum investmentamount required to add to an existing Fund account is generally 1. Institutional,financial intermediary, and Vanguard retail managed clients should contact Vanguardfor information on special eligibility rules that may apply to them regardi

Vanguard Target Retirement 2010 Fund Supplement to the Prospectus Dated January 27, 2017 Reorganization of Vanguard Target Retirement 2010 Fund into . 2010 Fund for shares of another Vanguard fund prior to the Closing Date by contacting us at 800-6