Vanguard Target Retirement Funds · Retirement 2045 Fund to 2.63% for the Target Retirement 2040 Fund. (The funds with target dates of 2015 through 2035, as well as the Target Retirement

Vanguard Target Retirement 2040 Fund






Vanguard Target Retirement Funds

Annual Report | September 30, 2018

Contents

Please note: The opinions expressed in this report are just that—informed opinions. They should not be considered promisesor advice. Also, please keep in mind that the information and opinions cover the period through the date on the front of thisreport. Of course, the risks of investing in your fund are spelled out in the prospectus.

See the Glossary for definitions of investment terms used in this report.

Vanguard’s Principles for Investing Success

We want to give you the best chance of investment success. Theseprinciples, grounded in Vanguard’s research and experience, can put you onthe right path.

Goals. Create clear, appropriate investment goals.

Balance. Develop a suitable asset allocation using broadly diversified funds.

Cost. Minimize cost.

Discipline. Maintain perspective and long-term discipline.

A single theme unites these principles: Focus on the things you can control.We believe there is no wiser course for any investor.

Your Fund’s Performance at a Glance. . . . . . . . . . . . . . . . . . 1

CEO’s Perspective. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Target Retirement 2040 Fund. . . . . . . . . . . . . . . . . . . . . . . . 6

Target Retirement 2045 Fund. . . . . . . . . . . . . . . . . . . . . . . 18





Your Fund’s After-Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 81

About Your Fund’s Expenses. . . . . . . . . . . . . . . . . . . . . . . . 83

Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Your Fund’s Performance at a Glance

1

Total Returns: Fiscal Year Ended September 30, 2018

TotalReturns

Vanguard Target Retirement 2040 Fund 9.37%

Target 2040 Composite Index 9.66

Mixed-Asset Target 2040 Funds Average 8.36

Mixed-Asset Target 2040 Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.











Mixed-Asset Target 2055+ Funds Average 9.53

Mixed-Asset Target 2055+ Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.

• For the 12 months ended September 30, 2018, the six Vanguard Target Retirement

Funds covered in this report recorded returns ranging from 9.37% for the Target

Retirement 2040 Fund to 9.85% for the Target Retirement 2045 Fund. (The funds with

target dates of 2015 through 2035, as well as the Target Retirement Income Fund, are

covered in a separate report.)

• Each fund posted returns that were in line with those of its composite benchmark

after expenses. Each fund surpassed the average returns of its peers.

• Vanguard Target Retirement Funds are designed to reach an allocation of 70% bonds

and 30% stocks within seven years after their target dates.

• For the ten years ended September 30—or since inception for the three newest

funds—the average annual returns ranged from 9.14% for the Target Retirement 2040

Fund to 11.41% for the Target Retirement 2065 Fund.

2

TotalReturns









For a benchmark description, see the Glossary.

Investments inTargetRetirement Funds are subject to the risks of their underlying funds. Theyear in the fundnamerefers to the approximate year (the target date)whenan investor in the fundwould retire and leave thework force. Thefundwill gradually shift its emphasis frommoreaggressive investments tomore conservativeonesbasedon its targetdate. An investment in aTargetRetirement Fund is not guaranteedat any time, includingonor after the target date.

Total Returns: Ten Years Ended September 30, 2018

Average

Annual Return

Target Retirement 2040 Fund 9.14%












Target Retirement 2055 Fund (Returns since inception: 8/18/2010) 11.08%


Spliced Mixed-Asset Target 2055+ Funds Average 10.19

Spliced Mixed-Asset Target 2055+ Funds Average: Derived from data provided by Lipper, a Thomson Reuters Company.





3

Average

Annual Return






The figures shown represent past performance, which is not a guarantee of future results. (Currentperformance may be lower or higher than the performance data cited. For performance data current to themost recent month-end, visit our website at vanguard.com/performance.) Note, too, that both investmentreturns and principal value can fluctuate widely, so an investor’s shares, when sold, could be worth moreor less than their original cost.

Expense RatiosYour Fund Compared With Its Peer Group

Acquired Fund Fees

and Expenses

Peer Group

Average

Target Retirement 2040 Fund 0.15% 0.42%

Target Retirement 2045 Fund 0.15 0.40





The fund expense figures shown—drawn from the prospectus dated January 25, 2018—represent an estimate of the weighted averageof the expense ratios and any transaction fees charged by the underlying mutual funds (the ”acquired” funds) in which the TargetRetirement Funds invest. The Target Retirement Funds do not charge any expenses or fees of their own. For the fiscal year endedSeptember 30, 2018, the acquired fund fees and expenses were 0.14% for the 2040 Fund, 0.15% for the 2045 Fund, 0.15% for the 2050Fund, 0.15% for the 2055 Fund, 0.15% for the 2060 Fund, and 0.15% for the 2065 Fund. Peer-group expense ratios are derived from dataprovided by Lipper, a Thomson Reuters Company, and capture information through year-end 2017.

Peer groups: For the 2040 Fund, Mixed-Asset Target 2040 Funds; for the 2045 Fund, Mixed-Asset Target 2045 Funds; for the 2050 Fund,Mixed-Asset Target 2050 Funds; for the 2055, 2060, and 2065 Funds, Mixed-Asset Target 2055+ Funds.

Dear Shareholder,

Over the years, I’ve found that prudent

investors exhibit a common trait:

discipline. No matter how the markets

move or what new investing fad hits the

headlines, those who stay focused on

their goals and tune out the noise are

set up for long-term success.

The prime gateway to investing is saving,

and you don’t usually become a saver

without a healthy dose of discipline.

Savers make the decision to sock away

part of their income, which means

spending less and delaying gratification,

no matter how difficult that may be.

Of course, disciplined investing extends

beyond diligent saving. The financial

markets, in the short term especially,

are unpredictable; I have yet to meet the

investor who can time them perfectly.

It takes discipline to resist the urge to

go all-in when markets are frothy or to

retreat when things look bleak.

Staying put with your investments is one

strategy for handling volatility. Another,

rebalancing, requires even more discipline

because it means steering your money

away from strong performers and toward

poorer performers.

Patience—a form of discipline—is also

the friend of long-term investors. Higher

returns are the potential reward for

weathering the market’s turbulence

and uncertainty.

CEO’s Perspective

Tim BuckleyPresident and Chief Executive Officer

4

We have been enjoying one of the longest

bull markets in history, but it won’t continue

forever. Prepare yourself now for how

you will react when volatility comes back.

Don’t panic. Don’t chase returns or look

for answers outside the asset classes you

trust. And be sure to rebalance periodically,

even when there’s turmoil.

Whether you’re a master of self-control,

get a boost from technology, or work with

a professional advisor, know that discipline

is necessary to get the most out of your

investment portfolio. And know that

Vanguard is with you for the entire ride.

Thank you for your continued loyalty.

Sincerely,

Mortimer J. Buckley

President and Chief Executive Officer

October 18, 2018

Market Barometer Average Annual Total Returns

Periods Ended September 30, 2018

One Year Three Years Five Years

Stocks

Russell 1000 Index (Large-caps) 17.76% 17.07% 13.67%

Russell 2000 Index (Small-caps) 15.24 17.12 11.07

Russell 3000 Index (Broad U.S. market) 17.58 17.07 13.46

FTSE All-World ex US Index (International) 2.13 10.18 4.51

Bonds

Bloomberg Barclays U.S. Aggregate Bond Index

(Broad taxable market) -1.22% 1.31% 2.16%

Bloomberg Barclays Municipal Bond Index

(Broad tax-exempt market) 0.35 2.24 3.54

FTSE Three-Month U.S. Treasury Bill Index 1.57 0.80 0.48

CPI

Consumer Price Index 2.28% 1.99% 1.52%

5

Target Retirement 2040 Fund

Fund ProfileAs of September 30, 2018

1 This figure—drawn from the prospectus dated January 25, 2018—represents an estimate of the weighted average of the expenseratios and any transaction fees charged by the underlying mutual funds (the ”acquired” funds) in which the Target Retirement 2040 Fundinvests. The fund does not charge any expenses or fees of its own. For the fiscal year ended September 30, 2018, the acquired fund feesand expenses were 0.14%.

6

Total Fund Volatility Measures

Target 2040

Composite

Index

MSCI US

Broad

Market

Index

R-Squared 0.99 0.89

Beta 0.97 0.80

These measures show the degree and timing of the fund’sfluctuations compared with the indexes over 36 months.

Allocation to Underlying Vanguard Funds

Vanguard Total Stock Market Index Fund

Investor Shares 51.1%

Vanguard Total International Stock Index

Fund Investor Shares 33.9

Vanguard Total Bond Market II Index Fund

Investor Shares 10.7

Vanguard Total International Bond Index


Total Fund Characteristics

Ticker Symbol VFORX

30-Day SEC Yield 2.15%

Acquired Fund Fees and Expenses1 0.15%

Fund Asset Allocation

85.0% Stocks

15.0% Bonds

All of the returns in this report represent past performance, which is not a guarantee of futureresults that may be achieved by the fund. (Current performance may be lower or higher thanthe performance data cited. For performance data current to the most recent month-end, visitour website at vanguard.com/performance.) Note, too, that both investment returns andprincipal value can fluctuate widely, so an investor’s shares, when sold, could be worth moreor less than their original cost. The returns shown do not reflect taxes that a shareholder would

pay on fund distributions or on the sale of fund shares.

Performance Summary


See Financial Highlights for dividend and capital gains information.7

Cumulative Performance: September 30, 2008, Through September 30, 2018Initial Investment of $10,000

2018201720162015201420132012201120102009

$35,000

2,000

23,988

Average Annual Total Returns


OneYear

FiveYears

TenYears

Final Valueof a $10,000Investment

Target Retirement 2040 Fund* 9.37% 9.17% 9.14% $23,988

• • • • • • • • Target 2040 Composite Index 9.66 9.44 9.36 24,463

– – – – Mixed-Asset Target 2040 FundsAverage 8.36 7.94 7.89 21,368

_________MSCI US Broad Market Index 17.62 13.52 12.12 31,391




8

Fiscal-Year Total Returns (%): September 30, 2008, Through September 30, 2018

–1.61 –1.87

2009

10.23 10.56

2010

–1.87 –1.45

2011

23.43 23.58

2012

17.75 17.92

2013

12.66 13.04

2014

–3.43 –3.33

2015

12.11 12.51

2016

16.26 16.45

2017

9.37 9.66

2018


Target 2040 Composite Index


Investment Companies (100.0%)

U.S. Stock Fund (51.1%)

Vanguard Total Stock Market Index Fund Investor Shares 185,464,644 13,505,535

International Stock Fund (33.9%)

Vanguard Total International Stock Index Fund Investor Shares 516,288,845 8,962,774

U.S. Bond Fund (10.7%) 1 Vanguard Total Bond Market II Index Fund Investor Shares 273,782,231 2,828,171

International Bond Fund (4.3%)

Vanguard Total International Bond Index Fund Investor Shares 104,664,842 1,138,754

Total Investment Companies (Cost $18,340,936) 26,435,234

Temporary Cash Investment (0.0%)

Money Market Fund (0.0%)1 Vanguard Market Liquidity Fund, 2.209% (Cost $11) 110 11

Total Investments (100.0%) (Cost $18,340,947) 26,435,245

Other Assets and Liabilities (0.0%)

Other Assets 80,292

Liabilities (70,213)

10,079

Net Assets (100%)

Applicable to 709,779,760 outstanding $.001 par value shares of

beneficial interest (unlimited authorization) 26,445,324

Net Asset Value Per Share $37.26

Market

Value•

Shares ($000)


Statement of Net AssetsAs of September 30, 2018

Financial Statements

The fund reports a complete list of its holdings in regulatory filings four times in each fiscal year, at

the quarter-ends. For the second and fourth fiscal quarters, the lists appear in the fund’s semiannual

and annual reports to shareholders. For the first and third fiscal quarters, the fund files the lists with

the Securities and Exchange Commission on Form N-Q. Shareholders can look up the fund’s Forms

N-Q on the SEC’s website at sec.gov. Forms N-Q may also be reviewed and copied at the SEC’s

Public Reference Room (see the back cover of this report for further information).

9


Statement of Assets and Liabilities

Assets

Investments in Securities, at Value—Affiliated Funds 26,435,245

Receivables for Investment Securities Sold 19,442

Receivables for Capital Shares Issued 53,356

Receivables for Accrued Income 7,494

Total Assets 26,515,537

Liabilities

Payables for Investment Securities Purchased 7,385

Payables for Capital Shares Redeemed 60,887

Other Liabilities 1,941

Total Liabilities 70,213

Net Assets 26,445,324

At September 30, 2018, net assets consisted of:

Amount

($000)

Paid-in Capital 17,954,039

Undistributed Net Investment Income 358,075

Accumulated Net Realized Gains 38,912

Unrealized Appreciation (Depreciation) 8,094,298


• See Note A in Notes to Financial Statements.

1 Affiliated fund available only to Vanguard funds and certain trusts and accounts managed by Vanguard. Rate shown for Vanguard Market Liquidity Fund is the 7-day yield.

Amount

($000)

See accompanying Notes, which are an integral part of the Financial Statements.

10

Year Ended

September 30, 2018

($000)

Investment Income

Income

Income Distributions Received from Affiliated Funds 535,697

Other Income 108

Net Investment Income—Note B 535,805

Realized Net Gain (Loss)

Capital Gain Distributions Received from Affiliated Funds 510

Affiliated Funds Sold 39,552

Futures Contracts 178

Realized Net Gain (Loss) 40,240

Change in Unrealized Appreciation (Depreciation) from Affiliated Funds 1,586,712

Net Increase (Decrease) in Net Assets Resulting from Operations 2,162,757

Statement of Operations



11

Statement of Changes in Net Assets



Year Ended September 30,

2018 2017

($000) ($000)

Increase (Decrease) in Net Assets

Operations

Net Investment Income 535,805 439,534

Realized Net Gain (Loss) 40,240 19,902

Change in Unrealized Appreciation (Depreciation) 1,586,712 2,566,980

Net Increase (Decrease) in Net Assets Resulting from Operations 2,162,757 3,026,416

Distributions

Net Investment Income (450,227) (349,773)

Realized Capital Gain1 (9,411) (72,933)

Total Distributions (459,638) (422,706)

Capital Share Transactions

Issued 6,304,784 6,021,161

Issued in Lieu of Cash Distributions 453,171 415,992

Redeemed (4,340,003) (4,087,681)

Net Increase (Decrease) from Capital Share Transactions 2,417,952 2,349,472

Total Increase (Decrease) 4,121,071 4,953,182

Net Assets

Beginning of Period 22,324,253 17,371,071

End of Period2 26,445,324 22,324,253

1 Includes fiscal 2018 and 2017 short-term gain distributions totaling $8,951,000 and $10,861,000, respectively. Short-term gain distributions are treated as ordinary income dividends for tax purposes.

2 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $358,075,000 and $288,641,000.

12

For a Share Outstanding Year Ended September 30,

Throughout Each Period 2018 2017 2016 2015 2014

Net Asset Value, Beginning of Period $34.73 $30.59 $28.09 $29.66 $26.80

Investment Operations

Net Investment Income .7861 .7181 .660 .648 .593

Capital Gain Distributions Received .0011 .0031 .003 .007 .001

Net Realized and Unrealized Gain (Loss)

on Investments 2.441 4.143 2.687 (1.634) 2.773

Total from Investment Operations 3.228 4.864 3.350 (.979) 3.367

Distributions

Dividends from Net Investment Income (.684) (.599) (.615) (.574) (.500)

Distributions from Realized Capital Gains (.014) (.125) (.235) (.017) (.007)

Total Distributions (.698) (.724) (.850) (.591) (.507)

Net Asset Value, End of Period $37.26 $34.73 $30.59 $28.09 $29.66

Total Return2 9.37% 16.26% 12.11% -3.43% 12.66%

Ratios/Supplemental Data

Net Assets, End of Period (Millions) $26,445 $22,324 $17,371 $15,724 $15,912

Ratio of Total Expenses to Average Net Assets — — — — —

Acquired Fund Fees and Expenses 0.14% 0.15% 0.16% 0.16% 0.18%

Ratio of Net Investment Income to

Average Net Assets 2.17% 2.23% 2.23% 2.09% 2.18%

Portfolio Turnover Rate 8% 8% 16% 21% 6%

1 Calculated based on average shares outstanding.

2 Total returns do not include account service fees that may have applied in the periods shown. Fund prospectuses provide information about any applicable account service fees.

Financial Highlights



13

Notes to Financial Statements


Vanguard Target Retirement 2040 Fund is registered under the Investment Company Act of 1940

as an open-end investment company, or mutual fund. The fund follows a balanced investment

strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to U.S.

and international stocks, and U.S. and international bonds. Financial statements and other information

about each underlying fund are available on vanguard.com.

A. The following significant accounting policies conform to generally accepted accounting

principles for U.S. investment companies. The fund consistently follows such policies in preparing

its financial statements.

1. Security Valuation: Investments are valued at the net asset value of each underlying Vanguard

fund determined as of the close of the New York Stock Exchange (generally 4 p.m., Eastern time)

on the valuation date.

2. Futures Contracts: The fund uses stock and bond futures contracts to a limited extent, with

the objectives of maintaining full exposure to the market and maintaining its target asset allocation.

The primary risks associated with the use of futures contracts are imperfect correlation between

changes in market values of investments held by the fund and the prices of futures contracts,

and the possibility of an illiquid market. Counterparty risk involving futures is mitigated because

a regulated clearinghouse is the counterparty instead of the clearing broker. To further mitigate

counterparty risk, the fund trades futures contracts on an exchange, monitors the financial strength

of its clearing brokers and clearinghouse, and has entered into clearing agreements with its clearing

brokers. The clearinghouse imposes initial margin requirements to secure the fund’s performance

and requires daily settlement of variation margin representing changes in the market value of each

contract. Any assets pledged as initial margin for open contracts are noted in the Statement of

Net Assets.

Futures contracts are valued at their quoted daily settlement prices. The notional amounts of

the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of the

contracts are recorded in the Statement of Assets and Liabilities as an asset (liability) and in the

Statement of Operations as unrealized appreciation (depreciation) until the contracts are closed,

when they are recorded as realized futures gains (losses).

During the year ended September 30, 2018, the fund’s average investments in long and short

futures contracts represented less than 1% and 0% of net assets, respectively, based on the

average of the notional amounts at each quarter-end during the period. The fund had no open

futures contracts at September 30, 2018.

3. Federal Income Taxes: The fund intends to continue to qualify as a regulated investment company

and distribute all of its taxable income. Management has analyzed the fund’s tax positions taken for

all open federal income tax years (September 30, 2015–2018), and has concluded that no provision

for federal income tax is required in the fund’s financial statements.

4. Distributions: Distributions to shareholders are recorded on the ex-dividend date. Distributions

are determined on a tax basis and may differ from net investment income and realized capital gains

for financial reporting purposes.

14


5. Credit Facility: The fund and certain other funds managed by The Vanguard Group (“Vanguard”)

participate in a $3.1 billion committed credit facility provided by a syndicate of lenders pursuant to

a credit agreement that may be renewed annually; each fund is individually liable for its borrowings,

if any, under the credit facility. Borrowings may be utilized for temporary and emergency purposes,

and are subject to the fund’s regulatory and contractual borrowing restrictions. The participating

funds are charged administrative fees and an annual commitment fee of 0.10% of the undrawn

amount of the facility; these fees are allocated to the funds based on a method approved by

the fund’s board of trustees and borne by the funds in which the fund invests (see Note B).

Any borrowings under this facility bear interest at a rate based upon the higher of the one-month

London Interbank Offered Rate, federal funds effective rate, or overnight bank funding rate plus

an agreed-upon spread.

The fund had no borrowings outstanding at September 30, 2018, or at any time during the period

then ended.

6. Other: Income and capital gain distributions received are recorded on the ex-dividend date.

Security transactions are accounted for on the date securities are bought or sold. Costs used to

determine realized gains (losses) on the sale of investment securities are those of the specific

securities sold.

B. In accordance with the terms of a Funds’ Service Agreement (the “FSA”) between Vanguard and

the fund, Vanguard furnishes to the fund investment advisory, corporate management, administrative,

marketing, and distribution services at Vanguard’s cost of operations (as defined by the FSA). These

costs of operations are allocated to the fund based on methods and guidelines approved by the

board of trustees. The FSA provides that expenses otherwise allocable to Vanguard funds-of-funds

may be reduced or eliminated to the extent of savings realized by the underlying Vanguard funds by

virtue of being part of a fund-of-funds. Accordingly, all expenses for services provided by Vanguard

to the fund and all other expenses incurred by the fund during the period ended September 30, 2018,

were borne by the underlying Vanguard funds in which the fund invests. The fund’s trustees and

officers are also trustees and officers, respectively, of the underlying Vanguard funds, as well as

directors and employees, respectively, of Vanguard.

C. Various inputs may be used to determine the value of the fund’s investments. These inputs are

summarized in three broad levels for financial statement purposes. The inputs or methodologies

used to value securities are not necessarily an indication of the risk associated with investing in

those securities.

Level 1—Quoted prices in active markets for identical securities.

Level 2—Other significant observable inputs (including quoted prices for similar securities, interest

rates, prepayment speeds, credit risk, etc.).

Level 3—Significant unobservable inputs (including the fund’s own assumptions used to determine

the fair value of investments). Any investments valued with significant unobservable inputs are

noted on the Statement of Net Assets.

At September 30, 2018, 100% of the market value of the fund’s investments was determined

based on Level 1 inputs.

15


D. Permanent differences between book-basis and tax-basis components of net assets are

reclassified among capital accounts in the financial statements to reflect their tax character.

These reclassifications have no effect on net assets or net asset value per share. As of period

end, the following permanent differences primarily attributable to the accounting for distributions

in connection with fund share redemptions were reclassified to the following accounts:

Amount

($000)

Paid-in Capital 17,323

Undistributed (Overdistributed) Net Investment Income (16,144)

Accumulated Net Realized Gains (Losses) (1,179)

Temporary differences between book-basis and tax-basis components of accumulated net earnings

(losses) arise when certain items of income, gain, or loss are recognized in different periods for

financial statement and tax purposes; these differences will reverse at some time in the future.

The differences are primarily related to the tax deferral of losses on wash sales. As of period end,

the tax-basis components of accumulated net earnings (losses) are detailed in the table as follows:

Amount

($000)

Undistributed Ordinary Income 396,401

Undistributed Long-Term Gains 586

Capital Loss Carryforwards (Non-expiring) —

Net Unrealized Gains (Losses) 8,094,298

As of September 30, 2018, gross unrealized appreciation and depreciation for investments and

derivatives based on cost for U.S. federal income tax purposes were as follows:

Amount

($000)

Tax Cost 18,340,947

Gross Unrealized Appreciation 8,209,497

Gross Unrealized Depreciation (115,199)

Net Unrealized Appreciation (Depreciation) 8,094,298

E. Capital shares issued and redeemed were:


2018 2017

Shares Shares

(000) (000)

Issued 174,069 187,954


Redeemed (119,638) (126,965)

Net Increase (Decrease) in Shares Outstanding 67,068 74,773

16


F. Transactions during the period in affiliated underlying Vanguard funds were as follows:

Current Period Transactions

Sept. 30, Proceeds Realized Sept. 30,

2017 from Net Change in Capital Gain 2018

Market Purchases Securities Gain Unrealized Distributions Market

Value at Cost Sold (Loss) App. (Dep.) Income Received Value

($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)

Vanguard Market

Liquidity Fund 10,689 NA1 NA1 (10) — 83 — 11

Vanguard Total

Bond Market II

Index Fund 2,138,153 1,435,471 646,345 — (99,108) 65,661 510 2,828,171

Vanguard Total

International Bond

Index Fund 860,907 290,374 11,438 — (1,089) 21,889 — 1,138,754

Vanguard Total

International Stock

Index Fund 7,692,108 1,693,623 312,150 7,146 (117,953) 229,929 — 8,962,774

Vanguard Total

Stock Market

Index Fund 11,636,768 1,065,642 1,034,153 32,416 1,804,862 218,135 — 13,505,535

Total 22,338,625 4,485,110 2,004,086 39,552 1,586,712 535,697 510 26,435,245

1 Not applicable—purchases and sales are for temporary cash investment purposes.

G. Management has determined that no events or transactions occurred subsequent to

September 30, 2018, that would require recognition or disclosure in these financial statements.

17




18


Target 2045

Composite

Index

MSCI US

Broad

Market

Index

R-Squared 0.99 0.90

Beta 0.97 0.82








Investor Shares 7.1




Ticker Symbol VTIVX




90.0% Stocks

10.0% Bonds



Performance Summary




2018201720162015201420132012201120102009

$35,000

2,000

24,195



OneYear

FiveYears

TenYears









20


–1.77 –1.87

2009

10.23 10.56

2010

–1.82 –1.45

2011

23.47 23.58

2012

17.70 17.92

2013

12.73 13.04

2014

–3.49 –3.37

2015

12.16 12.59

2016

16.84 17.01

2017

9.85 10.15

2018











Vanguard Total International Bond Index Fund Investor Shares 65,371,513 711,242



Money Market Fund (0.0%)1 Vanguard Market Liquidity Fund, 2.209% (Cost $6) 57 6



Other Assets 56,294


(940)

Net Assets (100%)

Applicable to 1,035,863,971 outstanding $.001 par value shares of



Market

Value•

Shares ($000)










21



Assets






Liabilities



Other Liabilities 2,014




Amount

($000)








Amount

($000)


22

Year Ended

September 30, 2018

($000)

Investment Income

Income


Other Income 129












23





2018 2017

($000) ($000)


Operations





Distributions





Issued 5,662,342 5,084,279


Redeemed (3,824,416) (3,501,855)



Net Assets


End of Period2 24,329,567 20,413,112



24






Capital Gain Distributions Received — .0011 .002 .004 .001


on Investments 1.636 2.696 1.692 (1.034) 1.747


Distributions


Distributions from Realized Capital Gains (.010) (.092) (.199) (.003) —



Total Return2 9.85% 16.84% 12.16% -3.49% 12.73%













25





strategy by investing in selected Vanguard funds to achieve its targeted allocation of assets to

U.S. and international stocks, and U.S. and international bonds. Financial statements and other

information about each underlying fund are available on vanguard.com.


















Net Assets.

















26








amount of the facility; these fees are allocated to the funds based on a method approved by the

fund’s board of trustees and borne by the funds in which the fund invests (see Note B). Any

borrowings under this facility bear interest at a rate based upon the higher of the one-month




then ended.




securities sold.















those securities.









27


D. Permanent differences between book-basis and tax-basis components of net assets are

reclassified among capital accounts in the financial statements to reflect their tax character.

These reclassifications have no effect on net assets or net asset value per share. As of period

end, the following permanent differences primarily attributable to the accounting for distributions

in connection with fund share redemptions were reclassified to the following accounts:

Amount

($000)


Undistributed (Overdistributed) Net Investment Income (14,102)

Accumulated Net Realized Gains (Losses) (714)






Amount

($000)


Undistributed Long-Term Gains —





Amount

($000)

Tax Cost 16,530,478






2018 2017

Shares Shares

(000) (000)

Issued 248,564 253,488


Redeemed (167,394) (174,328)


28








($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)

Vanguard Market


Vanguard Total

Bond Market II

Index Fund 1,432,028 753,046 397,731 (1,604) (62,377) 42,176 339 1,723,362

Vanguard Total

International Bond

Index Fund 603,691 129,205 20,983 (88) (583) 14,481 — 711,242

Vanguard Total

International Stock

Index Fund 7,317,231 1,806,730 273,773 6,011 (120,497) 222,560 — 8,735,702

Vanguard Total

Stock Market

Index Fund 11,055,891 1,269,911 938,050 21,454 1,750,989 211,056 — 13,160,195

Total 20,415,076 3,958,892 1,630,537 25,768 1,567,532 490,342 339 24,330,507




29




30


Target 2050

Composite

Index

MSCI US

Broad

Market

Index

R-Squared 0.99 0.89

Beta 0.97 0.82








Investor Shares 7.1




Ticker Symbol VFIFX




90.0% Stocks

10.0% Bonds



Performance Summary




2018201720162015201420132012201120102009

$35,000

2,000

24,196



OneYear

FiveYears

TenYears









32


–1.73 –1.86

2009

10.26 10.55

2010

–1.89 –1.45

2011

23.46 23.58

2012

17.74 17.92

2013

12.69 13.04

2014

–3.46 –3.37

2015

12.14 12.59

2016

16.84 17.01

2017

9.84 10.15

2018














Money Market Fund (0.0%)1 Vanguard Market Liquidity Fund, 2.209% (Cost $1,188) 11,886 1,188



Other Assets 52,892


6,365

Net Assets (100%)




Market

Value•

Shares ($000)










33



Assets





Other Assets 53


Liabilities






Amount

($000)








Amount

($000)


34

Year Ended

September 30, 2018

($000)

Investment Income

Income


Other Income 52












35





2018 2017

($000) ($000)


Operations





Distributions





Issued 4,834,564 4,182,146


Redeemed (2,830,456) (2,220,595)



Net Assets


End of Period2 16,804,008 13,407,105



36








on Investments 2.629 4.332 2.714 (1.609) 2.771


Distributions


Distributions from Realized Capital Gains (.010) (.034) (.088) (.004) —



Total Return2 9.84% 16.84% 12.14% -3.46% 12.69%













37

























Net Assets.

















38














then ended.




securities sold.















those securities.









39

40


D. Permanent differences between book-basis and tax-basis components of net asset, if any, are

reclassified among capital accounts in the financial statements to reflect their tax character. These

reclassifications have no effect on net assets or net asset value per share.






Amount

($000)







Amount

($000)

Tax Cost 12,310,590






2018 2017

Shares Shares

(000) (000)

Issued 131,840 129,546


Redeemed (76,965) (68,419)









($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)

Vanguard Market

Liquidity Fund 6,411 NA1 NA1 (4) — 69 — 1,188

Vanguard Total

Bond Market II

Index Fund 941,432 593,181 296,723 (219) (42,784) 28,467 225 1,194,887

Vanguard Total

International Bond

Index Fund 395,258 100,820 6,288 — (499) 9,643 — 489,291

Vanguard Total

International Stock

Index Fund 4,811,996 1,476,559 163,240 3,081 (87,115) 150,508 — 6,041,281

Vanguard Total

Stock Market

Index Fund 7,256,355 1,186,251 564,513 9,460 1,183,443 142,847 — 9,070,996

Total 13,411,452 3,356,811 1,030,764 12,318 1,053,045 331,534 225 16,797,643




41




42


Target 2055

Composite

Index

MSCI US

Broad

Market

Index

R-Squared 0.99 0.90

Beta 0.97 0.82








Investor Shares 7.1




Ticker Symbol VFFVX




90.0% Stocks

10.0% Bonds



Performance Summary



Cumulative Performance: August 18, 2010, Through September 30, 2018Initial Investment of $10,000

201820172016201520142013201220112010

$35,000

7,000

23,474



OneYear

FiveYears

SinceInception

(8/18/2010)




– – – – Spliced Mixed-Asset Target 2055+Funds Average 9.53 8.78 10.19 21,978



"Since Inception" performance is calculated from the inception date for both the fund and its comparative standards.


44

Fiscal-Year Total Returns (%): August 18, 2010, Through September 30, 2018

4.90 5.03

2010

–1.58 –1.45

2011

23.56 23.58

2012

17.73 17.92

2013

12.69 13.04

2014

–3.58 –3.37

2015

12.13 12.59

2016

16.86 17.01

2017

9.79 10.15

2018




45


U.S. Stock Fund (54.0%) Vanguard Total Stock Market Index Fund Investor Shares 59,410,075 4,326,242

International Stock Fund (35.9%) Vanguard Total International Stock Index Fund Investor Shares 165,793,080 2,878,168

U.S. Bond Fund (7.1%) 1 Vanguard Total Bond Market II Index Fund Investor Shares 55,127,986 569,472

International Bond Fund (2.9%) Vanguard Total International Bond Index Fund Investor Shares 21,286,736 231,600



Money Market Fund (0.1%)1 Vanguard Market Liquidity Fund, 2.209% (Cost $3,066) 30,662 3,066

Total Investments (100%) (Cost $6,611,265) 8,008,548


Other Assets 33,528


2,108

Net Assets (100%)

Applicable to 195,596,987 outstanding $.001 par value shares of beneficial interest (unlimited authorization) 8,010,656


Market

Value•

Shares ($000)












Assets Investments in Securities, at Value—Affiliated Funds 8,008,548




Other Assets 14


Liabilities Payables for Investment Securities Purchased 1,513




At September 30, 2018, net assets consisted of: Amount

($000)



Accumulated Net Realized Losses (1,815)





Amount

($000)


46

Year Ended

September 30, 2018

($000)

Investment Income

Income





Affiliated Funds Sold (834)


Realized Net Gain (Loss) (672)

Change in Unrealized Appreciation (Depreciation) from Affiliated Funds 464,109

Net Increase (Decrease) in Net Assets Resulting from Operations 614,686




47





2018 2017

($000) ($000)


Operations


Realized Net Gain (Loss) (672) 1,087

Change in Unrealized Appreciation (Depreciation) 464,109 610,032

Net Increase (Decrease) in Net Assets Resulting from Operations 614,686 711,401

Distributions


Realized Capital Gain1 — (224)



Issued 3,016,467 2,324,300


Redeemed (1,218,478) (833,493)



Net Assets


End of Period2 8,010,656 5,599,968

1 Includes fiscal 2018 and 2017 short-term gain distributions totaling $0 and $224,000, respectively. Short-term gain distributions are treated as ordinary income dividends for tax purposes.


48








on Investments 2.819 4.688 2.974 (1.736) 3.033

Total from Investment Operations 3.688 5.486 3.619 (1.100) 3.611

Distributions


Distributions from Realized Capital Gains — (.002) (.016) (.006) (.004)



Total Return2 9.79% 16.86% 12.13% -3.58% 12.69%













49

























Net Assets.


the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of

the contracts are recorded in the Statement of Assets and Liabilities and in the Statement of

Operations as unrealized appreciation (depreciation) until the contracts are closed, when they

are recorded as realized futures gains (losses).












50














then ended.




securities sold.















those securities.









51


D. Permanent differences between book-basis and tax-basis components of net assets, if any, are








Amount

($000)



Capital Loss Carryforwards (Non-expiring) (1,816)




Amount

($000)

Tax Cost 6,611,265






2018 2017

Shares Shares

(000) (000)

Issued 75,923 66,428


Redeemed (30,634) (23,689)


52








($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)

Vanguard Market

Liquidity Fund 2,448 NA1 NA1 (2) — 65 — 3,066

Vanguard Total

Bond Market II

Index Fund 393,769 302,096 107,108 (392) (18,893) 12,930 97 569,472

Vanguard Total

International Bond

Index Fund 164,044 70,662 2,878 — (228) 4,238 — 231,600

Vanguard Total

International Stock

Index Fund 2,010,617 962,615 44,424 (620) (50,020) 68,669 — 2,878,168

Vanguard Total

Stock Market

Index Fund 3,024,478 928,986 160,652 180 533,250 65,347 — 4,326,242

Total 5,595,356 2,264,359 315,062 (834) 464,109 151,249 97 8,008,548




53




54


Target 2060

Composite

Index

MSCI US

Broad

Market

Index

R-Squared 0.99 0.90

Beta 0.97 0.82








Investor Shares 7.1




Ticker Symbol VTTSX




90.0% Stocks

10.0% Bonds



Performance Summary



Cumulative Performance: January 19, 2012, Through September 30, 2018Initial Investment of $10,000

2018201720162015201420132012

$28,000

7,000

19,998



OneYear

FiveYears

SinceInception

(1/19/2012)




– – – – Spliced Mixed-Asset Target 2055+Funds Average 9.53 8.78 10.18 19,135





56

Fiscal-Year Total Returns (%): January 19, 2012, Through September 30, 2018

8.70 8.77

2012

17.69 17.92

2013

12.72 13.04

2014

–3.61 –3.37

2015

12.13 12.59

2016

16.84 17.01

2017

9.81 10.15

2018














Money Market Fund (0.0%)1 Vanguard Market Liquidity Fund, 2.209% (Cost $578) 5,779 578



Other Assets 12,079

Liabilities (9,997)

2,082

Net Assets (100%)




Market

Value•

Shares ($000)










57



Assets



Receivables for Accrued Income 613

Other Assets 6


Liabilities






Amount

($000)



Accumulated Net Realized Gains 319

Unrealized Appreciation (Depreciation) 474,166




Amount

($000)


58

Year Ended

September 30, 2018

($000)

Investment Income

Income


Other Income 5




Affiliated Funds Sold 403


Realized Net Gain (Loss) 457






59





2018 2017

($000) ($000)


Operations


Realized Net Gain (Loss) 457 176

Change in Unrealized Appreciation (Depreciation) 177,389 216,221

Net Increase (Decrease) in Net Assets Resulting from Operations 236,996 252,105

Distributions


Realized Capital Gain1 — (77)



Issued 1,437,252 1,001,387


Redeemed (514,124) (315,380)

Net Increase (Decrease) from Capital Share Transactions 963,886 710,171

Total Increase (Decrease) 1,159,121 937,577

Net Assets


End of Period2 3,239,639 2,080,518

1 Includes fiscal 2018 and 2017 short-term gain distributions totaling $0 and $77,000, respectively. Short-term gain distributions are treated as ordinary income dividends for tax purposes.


60

61






Capital Gain Distributions Received — .0021 .003 .004 .0011


on Investments 2.495 4.126 2.635 (1.523) 2.572


Distributions


Distributions from Realized Capital Gains — (.002) (.020) (.007) (.001)



Total Return2 9.81% 16.84% 12.13% -3.61% 12.72%


Net Assets, End of Period (Millions) $3,240 $2,081 $1,143 $733 $485



































Net Assets.


the contracts are not recorded in the Statement of Net Assets. Fluctuations in the value of

the contracts are recorded in the Statement of Assets and Liabilities and in the Statement of

Operations as unrealized appreciation (depreciation) until the contracts are closed, when they

are recorded as realized futures gains (losses).












62














then ended.




securities sold.















those securities.









63










Amount

($000)




Net Unrealized Gains (Losses) 474,166



Amount

($000)

Tax Cost 2,763,391

Gross Unrealized Appreciation 496,832


Net Unrealized Appreciation (Depreciation) 474,166



2018 2017

Shares Shares

(000) (000)

Issued 40,975 32,339

Issued in Lieu of Cash Distributions 1,174 833

Redeemed (14,643) (10,161)


64








($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)

Vanguard Market


Vanguard Total

Bond Market II

Index Fund 146,423 125,208 33,821 112 (7,575) 5,052 37 230,347

Vanguard Total

International Bond

Index Fund 60,960 35,037 1,369 — (111) 1,634 — 94,517

Vanguard Total

International Stock

Index Fund 747,045 445,053 7,872 2 (22,390) 26,828 — 1,161,838

Vanguard Total

Stock Market

Index Fund 1,125,657 462,541 45,676 290 207,465 25,605 — 1,750,277

Total 2,081,259 1,067,839 88,738 403 177,389 59,145 37 3,237,557




65




66







Investor Shares 7.0




Ticker Symbol VLXVX




90.0% Stocks

10.0% Bonds



Performance Summary



Cumulative Performance: July 12, 2017, Through September 30, 2018Initial Investment of $10,000

20182017

$15,000

7,000

11,408



OneYear

SinceInception

(7/12/2017)


Target Retirement 2065 Fund* 9.75% 11.41% $11,408

• • • • • • • • Target 2065 Composite Index 10.15 11.65 11,439

– – – – Spliced Mixed-Asset Target 2055+Funds Average 9.53 11.14 11,375

_________MSCI US Broad Market Index 17.62 17.66 12,193




68

Fiscal-Year Total Returns (%): July 12, 2017, Through September 30, 2018

3.95 3.84

2017

9.75 10.15

2018






Vanguard Total Stock Market Index Fund Investor Shares 1,496,993 109,011


Vanguard Total International Stock Index Fund Investor Shares 4,148,372 72,016



Vanguard Total International Bond Index Fund Investor Shares 553,866 6,026

Total Investment Companies (Cost $196,062) 201,158


Money Market Fund (0.1%)1 Vanguard Market Liquidity Fund, 2.209% (Cost $276) 2,763 276

Total Investments (100.0%) (Cost $196,338) 201,434


Other Assets 863

Liabilities (786)

77

Net Assets (100%)


beneficial interest (unlimited authorization) 201,511


Market

Value•

Shares ($000)










69



Assets

Investments in Securities, at Value—Affiliated Funds 201,434

Receivables for Accrued Income 38

Receivables for Capital Shares Issued 824

Other Assets 1

Total Assets 202,297

Liabilities

Payables for Investment Securities Purchased 335

Payables for Capital Shares Redeemed 451

Total Liabilities 786

Net Assets 201,511


Amount

($000)



Accumulated Net Realized Gains 4

Unrealized Appreciation (Depreciation) 5,096

Net Assets 201,511



Amount

($000)


70

Year Ended

September 30, 2018

($000)

Investment Income

Income


Other Income 1




Affiliated Funds Sold 7

Futures Contracts 6

Realized Net Gain (Loss) 14






71




July 12,

Year Ended 20171 to

September 30, September 30,

2018 2017

($000) ($000)


Operations

Net Investment Income 2,513 73

Realized Net Gain (Loss) 14 (10)

Change in Unrealized Appreciation (Depreciation) 4,758 338

Net Increase (Decrease) in Net Assets Resulting from Operations 7,285 401

Distributions

Net Investment Income (366) —

Realized Capital Gain — —

Total Distributions (366) —


Issued 214,128 19,735

Issued in Lieu of Cash Distributions 346 —

Redeemed (38,875) (1,143)

Net Increase (Decrease) from Capital Share Transactions 175,599 18,592

Total Increase (Decrease) 182,518 18,993

Net Assets

Beginning of Period 18,993 —

End of Period2 201,511 18,993

1 Inception.

2 Net Assets—End of Period includes undistributed (overdistributed) net investment income of $2,220,000 and $73,000.

72

Year July 12,

Ended 20171 to

Sept. 30, Sept. 30,

For a Share Outstanding Throughout Each Period 2018 2017

Net Asset Value, Beginning of Period $20.79 $20.00


Net Investment Income2 .524 .150

Capital Gain Distributions Received2 — —

Net Realized and Unrealized Gain (Loss) on Investments 1.496 .640

Total from Investment Operations 2.020 .790

Distributions

Dividends from Net Investment Income (.170) —

Distributions from Realized Capital Gains — —

Total Distributions (.170) —

Net Asset Value, End of Period $22.64 $20.79

Total Return3 9.75% 3.95%


Net Assets, End of Period (Millions) $202 $19

Ratio of Total Expenses to Average Net Assets — —

Acquired Fund Fees and Expenses 0.15% 0.15%4

Ratio of Net Investment Income to Average Net Assets 2.37% 3.30%4

Portfolio Turnover Rate 1% 29%

1 Inception.



4 Annualized.




73

























Net Assets.

















74














then ended.




securities sold.















those securities.









75










Amount

($000)




Net Unrealized Gains (Losses) 5,096



Amount

($000)

Tax Cost 196,338

Gross Unrealized Appreciation 8,068


Net Unrealized Appreciation (Depreciation) 5,096


Year Ended July 12, 20171 to

September 30, 2018 September 30, 2017

Shares Shares

(000) (000)

Issued 9,733 969

Issued in Lieu of Cash Distributions 16 —

Redeemed (1,762) (56)

Net Increase (Decrease) in Shares Outstanding 7,987 913

1 Inception.

76








($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)

Vanguard Market

Liquidity Fund 101 NA1 NA1 — — 4 — 276

Vanguard Total

Bond Market II

Index Fund 1,315 13,250 210 (1) (249) 198 1 14,105

Vanguard Total

International Bond

Index Fund 564 5,556 86 (1) (7) 51 — 6,026

Vanguard Total

International Stock

Index Fund

Investor Shares 6,797 67,985 145 2 (2,623) 1,144 — 72,016

Vanguard Total

International Stock

Index Fund ETF Shares2 — 122 122 — — — — —

Vanguard Total

Stock Market

Index Fund

Investor Shares 10,166 91,660 459 7 7,637 1,115 — 109,011

Vanguard Total

Stock Market Index

Fund ETF Shares2 — 526 526 — — — — —

Total 18,943 179,099 1,548 7 4,758 2,512 1 201,434


2 The fund invested in ETF shares during the period, but sold their positions before the period end.



77

78

To the Board of Trustees of Vanguard Chester Funds and Shareholders of Vanguard Target

Retirement 2040 Fund, Vanguard Target Retirement 2045 Fund, Vanguard Target Retirement

2050 Fund, Vanguard Target Retirement 2055 Fund, Vanguard Target Retirement 2060 Fund

and Vanguard Target Retirement 2065 Fund

Opinions on the Financial Statements

We have audited the accompanying statements of net assets and statements of assets and

liabilities of each of the funds indicated in the table below (six of the funds constituting Vanguard

Chester Funds, hereafter collectively referred to as the “Funds”) as of September 30, 2018, the

related statements of operations and of changes in net assets for each of the periods indicated

in the table below, including the related notes, and the financial highlights for each of the periods

indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial

statements present fairly, in all material respects, the financial position of each of the Funds as of

September 30, 2018, the results of each of their operations and the changes in each of their net

assets for each of the periods indicated in the table below, and each of the financial highlights for

each of the periods indicated therein in conformity with accounting principles generally accepted

in the United States of America.






Statements of operations for the year ended September 30,

2018 and statements of changes in net assets for each of the

two years in the period ended September 30, 2018

Vanguard Target Retirement 2065 Fund Statements of operations for the year ended September 30,

2018 and statements of changes in net assets for the year

ended September 30, 2018 and for the period July 12, 2017

(inception) through September 30, 2017

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility

is to express an opinion on the Funds’ financial statements based on our audits. We are a public

accounting firm registered with the Public Company Accounting Oversight Board (United States)

(“PCAOB”) and are required to be independent with respect to the Funds in accordance with

the U.S. federal securities laws and the applicable rules and regulations of the Securities and

Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of

the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement, whether

due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the

financial statements, whether due to error or fraud, and performing procedures that respond to

those risks. Such procedures included examining, on a test basis, evidence regarding the amounts

and disclosures in the financial statements. Our audits also included evaluating the accounting

Report of Independent Registered Public Accounting Firm

principles used and significant estimates made by management, as well as evaluating the overall

presentation of the financial statements. Our procedures included confirmation of securities owned

as of September 30, 2018 by agreement to the underlying ownership records of the transfer agent.

We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

November 13, 2018

We have served as the auditor of one or more investment companies in The Vanguard Group of

Funds since 1975.

Special 2018 tax information (unaudited) for Vanguard Target Retirement Funds

This information for the fiscal year ended September 30, 2018, is included pursuant to provisions

of the Internal Revenue Code.

The funds distributed capital gain dividends (from net long-term capital gains) to shareholders

during the fiscal year as follows:

Fund ($000)

Target Retirement 2040 Fund 479

Target Retirement 2045 Fund —





79

For nonresident alien shareholders, 100% of short-term capital gain dividends distributed by the

funds are qualified short-term capital gains.

The funds distributed qualified dividend income to shareholders during the fiscal year as follows:

Fund ($000)

Target Retirement 2040 Fund 308,243






For corporate shareholders, the percentage of investment income (dividend income plus short-term

gains, if any) that qualifies for the dividends-received deduction is as follows:

Fund Percentage


Target Retirement 2045 Fund 35.9





The funds designate to shareholders foreign source income and foreign taxes paid as follows:

Foreign Source Income Foreign Taxes Paid

Fund ($000) ($000)

Target Retirement 2040 Fund 254,228 15,046





Target Retirement 2065 Fund 1,207 75

Shareholders will receive more detailed information with their Form 1099-DIV in January 2019

to determine the calendar-year amounts to be included on their 2018 tax returns.

80

Your Fund’s After-Tax Returns

81

This table presents returns for your fund both before and after taxes. The after-tax returns are

shown in two ways: (1) assuming that an investor owned the fund during the entire period and

paid taxes on the fund’s distributions, and (2) assuming that an investor paid taxes on the fund’s

distributions and sold all shares at the end of each period.

Calculations are based on the highest individual federal income tax and capital gains tax rates in

effect at the times of the distributions and the hypothetical sales. State and local taxes were not

considered. After-tax returns reflect any qualified dividend income, using actual prior-year figures

and estimates for 2018. (In the example, returns after the sale of fund shares may be higher than

those assuming no sale. This occurs when the sale would have produced a capital loss. The

calculation assumes that the investor received a tax deduction for the loss.)

Please note that your actual after-tax returns will depend on your tax situation and may differ from

those shown. Also note that if you own the fund in a tax-deferred account, such as an individual

retirement account or a 401(k) plan, this information does not apply to you. Such accounts are not

subject to current taxes.

Finally, keep in mind that a fund’s performance—whether before or after taxes—does not

guarantee future results.

Average Annual Total Returns: Target Retirement FundsPeriods Ended September 30, 2018

One

Year

Five

Years

Ten

Years


Returns Before Taxes 9.37% 9.17% 9.14%

Returns After Taxes on Distributions 8.78 8.53 8.59

Returns After Taxes on Distributions and Sale of Fund Shares 5.78 7.08 7.34

One

Year

Five

Years

Ten

Years





One

Year

Five

Years

Ten

Years





Average Annual Total Returns: Target Retirement Funds Periods Ended September 30, 2018

82

One

Year

Five

Years

Since

Inception

(8/18/2010)





One

Year

Five

Years

Since

Inception

(1/19/2012)





One

Year

Five

Years

Since

Inception

(7/12/2017)


Returns Before Taxes 9.75% — 11.41%

Returns After Taxes on Distributions 9.50 — 11.20

Returns After Taxes on Distributions and Sale of Fund Shares 5.86 — 8.67

About Your Fund’s Expenses

83

As a shareholder of the fund, you incur ongoing costs, which include costs for portfolio

management, administrative services, and shareholder reports (like this one), among others.

Operating expenses, which are deducted from a fund’s gross income, directly reduce the

investment return of the fund.

A typical fund’s expenses are expressed as a percentage of its average net assets. The Target

Retirement Funds have no direct expenses, but each fund bears its proportionate share of the costs

for the underlying funds in which it invests. These indirect expenses make up the acquired fund fees

and expenses, also expressed as a percentage of average net assets.

The following examples are intended to help you understand the ongoing cost (in dollars) of investing

in your fund and to compare these costs with those of other mutual funds. The examples are based

on an investment of $1,000 made at the beginning of the period shown and held for the entire

period. The costs were calculated using the acquired fund fees and expenses for each Target

Retirement Fund.

The accompanying table illustrates your fund’s costs in two ways:

• Based on actual fund return. This section helps you to estimate the actual expenses that you

paid over the period. The ”Ending Account Value“ shown is derived from the fund‘s actual return,

and the third column shows the dollar amount that would have been paid by an investor who started

with $1,000 in the fund. You may use the information here, together with the amount you invested,

to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided

by $1,000 = 8.6), then multiply the result by the number given for your fund under the heading

”Expenses Paid During Period.“

• Based on hypothetical 5% yearly return. This section is intended to help you compare your

fund‘s costs with those of other mutual funds. It assumes that the fund had a yearly return of 5%

before expenses, but that the expense ratio is unchanged. In this case—because the return used is

not the fund’s actual return—the results do not apply to your investment. The example is useful in

making comparisons because the Securities and Exchange Commission requires all mutual funds to

calculate expenses based on a 5% return. You can assess your fund’s costs by comparing this

hypothetical example with the hypothetical examples that appear in shareholder reports of other

funds.

Note that the expenses shown in the table are meant to highlight and help you compare ongoingcosts only and do not reflect transaction costs incurred by the fund for buying and selling securities.Further, the expenses do not include any purchase, redemption, or account service fees describedin the fund prospectus. If such fees were applied to your account, your costs would be higher. Yourfund does not carry a “sales load.”

The calculations assume no shares were bought or sold during the period. Your actual costs may

have been higher or lower, depending on the amount of your investment and the timing of any

purchases or redemptions.

You can find more information about the fund’s expenses, including annual expense ratios, in the

Financial Statements section of this report. For additional information on operating expenses and

other shareholder costs, please refer to your fund’s current prospectus.

84

Six Months Ended September 30, 2018

Beginning

Account Value

3/31/2018

Ending

Account Value

9/30/2018

Expenses

Paid During

Period

Based on Actual Fund Return

Target Retirement 2040 Fund $1,000.00 $1,047.22 $0.72






Based on Hypothetical 5% Yearly Return







The calculations are based on the acquired fund fees and expenses for the most recent six-month period. The funds’ annualized expensefigures for the period are (in order as listed from top to bottom above) 0.14%, 0.15%, 0.15%, 0.15%, 0.15%, and 0.15%. The dollaramounts shown as ”Expenses Paid” are equal to the annualized average weighted expense ratio for the underlying funds multiplied by theaverage account value over the period, multiplied by the number of days in the most recent six-month period, then divided by the numberof days in the most recent 12-month period (183/365).

Glossary

85

30-Day SEC Yield. A fund’s 30-day SEC yield is derived using a formula specified by the U.S.

Securities and Exchange Commission. Under the formula, data related to the fund’s security

holdings in the previous 30 days are used to calculate the fund’s hypothetical net income for that

period, which is then annualized and divided by the fund’s estimated average net assets over the

calculation period. For the purposes of this calculation, a security’s income is based on its current

market yield to maturity (for bonds), its actual income (for asset-backed securities), or its

projected dividend yield (for stocks). Because the SEC yield represents hypothetical annualized

income, it will differ—at times significantly—from the fund’s actual experience. As a result, the

fund’s income distributions may be higher or lower than implied by the SEC yield.

Acquired Fund Fees and Expenses. Funds that invest in other Vanguard funds incur no direct

expenses, but they do bear proportionate shares of the operating, administrative, and advisory

expenses of the underlying funds, and they must pay any fees charged by those funds. The figure

for acquired fund fees and expenses represents a weighted average of these underlying costs.

Acquired is a term that the Securities and Exchange Commission applies to any mutual fund

whose shares are owned by another fund.

Beta. A measure of the magnitude of a fund’s past share-price fluctuations in relation to the ups

and downs of a given market index. The index is assigned a beta of 1.00. Compared with a given

index, a fund with a beta of 1.20 typically would have seen its share price rise or fall by 12%

when the index rose or fell by 10%. For this report, beta is based on returns over the past 36

months for both the fund and the index. Note that a fund’s beta should be reviewed in conjunction

with its R-squared (see definition). The lower the R-squared, the less correlation there is between

the fund and the index, and the less reliable beta is as an indicator of volatility.

Expense Ratio. A fund’s total annual operating expenses expressed as a percentage of the fund’s

average net assets. The expense ratio includes management and administrative expenses, but

does not include the transaction costs of buying and selling portfolio securities.

Inception Date. The date on which the assets of a fund (or one of its share classes) are first

invested in accordance with the fund’s investment objective. For funds with a subscription period,

the inception date is the day after that period ends. Investment performance is measured from

the inception date.

R-Squared. A measure of how much of a fund’s past returns can be explained by the returns

from the market in general, as measured by a given index. If a fund’s total returns were precisely

synchronized with an index’s returns, its R-squared would be 1.00. If the fund’s returns bore no

relationship to the index’s returns, its R-squared would be 0. For this report, R-squared is based

on returns over the past 36 months for both the fund and the index.

Benchmark Information

Spliced Mixed-Asset Target 2055+ Funds Average: Mixed-Asset Target 2050 Funds Average

through August 31, 2013; Mixed-Asset Target 2055+ Funds Average thereafter.

86

Target 2040 Composite Index: Derived by applying the fund’s target asset allocation to the

results of the following benchmarks: for international stocks of developed markets, the MSCI

EAFE Index through December 15, 2010, the MSCI ACWI ex USA IMI Index through June 2,

2013, and the FTSE Global All Cap ex US Index thereafter; for emerging-market stocks, the Select

Emerging Markets Index through August 23, 2006, the MSCI Emerging Markets Index through

December 15, 2010, the MSCI ACWI ex USA IMI Index through June 2, 2013, and the FTSE

Global All Cap ex US Index thereafter; for U.S. bonds, the Bloomberg Barclays U.S. Aggregate

Bond Index through December 31, 2009, and the Bloomberg Barclays U.S. Aggregate Float

Adjusted Index thereafter; for international bonds, the Bloomberg Barclays Global Aggregate

ex-USD Float Adjusted RIC Capped Index beginning June 3, 2013; and for U.S. stocks, the MSCI

US Broad Market Index through June 2, 2013, and the CRSP US Total Market Index thereafter.

International stock benchmark returns are adjusted for withholding taxes.










ex-USD Float Adjusted RIC Capped Index beginning June 3, 2013; and for U.S. stocks, the Dow

Jones U.S. Total Stock Market Index (formerly known as the Dow Jones Wilshire 5000 Index)

through April 22, 2005, the MSCI US Broad Market Index through June 2, 2013, and the CRSP US

Total Market Index thereafter. International stock benchmark returns are adjusted for withholding

taxes.













87




2013, and the FTSE Global All Cap ex US Index thereafter; for emerging-market stocks, the MSCI

Emerging Markets Index through December 15, 2010, the MSCI ACWI ex USA IMI Index through

June 2, 2013, and the FTSE Global All Cap ex US Index thereafter; for U.S. bonds, the Bloomberg

Barclays U.S. Aggregate Float Adjusted Index; for international bonds, the Bloomberg Barclays

Global Aggregate ex-USD Float Adjusted RIC Capped Index beginning June 3, 2013; and for U.S.

stocks, the MSCI US Broad Market Index through June 2, 2013, and the CRSP US Total Market

Index thereafter. International stock benchmark returns are adjusted for withholding taxes.



ACWI ex USA IMI Index through June 2, 2013, and the FTSE Global All Cap ex US Index

thereafter; for emerging-market stocks, the MSCI ACWI ex USA IMI Index through June 2, 2013,

and the FTSE Global All Cap ex US Index thereafter; for U.S. bonds, the Bloomberg Barclays U.S.

Aggregate Float Adjusted Index; for international bonds, the Bloomberg Barclays Global Aggregate





results of the following benchmarks: the FTSE Global All Cap ex US Index for international stocks,

the Bloomberg Barclays U.S. Aggregate Float Adjusted Index for U.S. bonds, the Bloomberg

Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index for international bonds, and

the CRSP US Total Market Index for U.S. stocks. International stock benchmark returns are

adjusted for withholding taxes.

BLOOMBERG is a trademark and service mark of Bloomberg Finance L.P. BARCLAYS is a trademark and service mark

of Barclays Bank Plc, used under license. Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services

Limited (BISL) (collectively, Bloomberg), or Bloomberg’s licensors, own all proprietary rights in the Bloomberg Barclays

U.S. Aggregate Bond Index, Bloomberg Barclays U.S. Aggregate Float Adjusted Index, and the Bloomberg Barclays Global

Aggregate ex-USD Float Adjusted RIC Capped Index (USD Hedged) (the Indices or Bloomberg Barclays Indices).

Neither Barclays Bank Plc, Barclays Capital Inc., or any affiliate (collectively Barclays) or Bloomberg is the issuer or

producer of the Target Retirement Funds (including the Total Bond Market II Index Fund and the Total International Bond

Index Fund) and neither Bloomberg nor Barclays has any responsibilities, obligations or duties to investors in the Target

Retirement Funds. The Indices are licensed for use by The Vanguard Group, Inc. (Vanguard) as the sponsor of the Target

Retirement Funds. Bloomberg and Barclays’ only relationship with Vanguard in respect to the Indices is the licensing of

the Indices, which is determined, composed and calculated by BISL, or any successor thereto, without regard to the

Issuer or the Target Retirement Funds or the owners of the Target Retirement Funds.

Additionally, Vanguard may for itself execute transaction(s) with Barclays in or relating to the Indices in connection with

the Target Retirement Funds. Investors acquire the Target Retirement Funds from Vanguard and investors neither acquire

any interest in the Indices nor enter into any relationship of any kind whatsoever with Bloomberg or Barclays upon making

an investment in the Target Retirement Funds. The Target Retirement Funds are not sponsored, endorsed, sold or promoted

by Bloomberg or Barclays. Neither Bloomberg nor Barclays makes any representation or warranty, express or implied

regarding the advisability of investing in the Target Retirement Funds or the advisability of investing in securities generally

or the ability of the Indices to track corresponding or relative market performance. Neither Bloomberg nor Barclays has

passed on the legality or suitability of the Target Retirement Funds with respect to any person or entity. Neither Bloomberg

nor Barclays is responsible for and has not participated in the determination of the timing of, prices at, or quantities of the

Target Retirement Funds to be issued. Neither Bloomberg nor Barclays has any obligation to take the needs of the Issuer

or the owners of the Target Retirement Funds or any other third party into consideration in determining, composing or

calculating the Indices. Neither Bloomberg nor Barclays has any obligation or liability in connection with administration,

marketing or trading of the Target Retirement Funds.

The licensing agreement between Bloomberg and Barclays is solely for the benefit of Bloomberg and Barclays and not

for the benefit of the owners of the Target Retirement Funds, investors or other third parties. In addition, the licensing

agreement between Vanguard and Bloomberg is solely for the benefit of Vanguard and Bloomberg and not for the

benefit of the owners of the Target Retirement Funds, investors or other third parties.

88

NEITHER BLOOMBERG NOR BARCLAYS SHALL HAVE ANY LIABILITY TO THE ISSUER, INVESTORS OR TO OTHER THIRD

PARTIES FOR THE QUALITY, ACCURACY AND/OR COMPLETENESS OF THE BLOOMBERG BARCLAYS INDICES OR ANY

DATA INCLUDED THEREIN OR FOR INTERRUPTIONS IN THE DELIVERY OF THE BLOOMBERG BARCLAYS INDICES.

NEITHER BLOOMBERG NOR BARCLAYS MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE

OBTAINED BY THE ISSUER, THE INVESTORS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE BLOOMBERG

BARCLAYS INDICES OR ANY DATA INCLUDED THEREIN. NEITHER BLOOMBERG NOR BARCLAYS MAKES ANY EXPRESS

OR IMPLIED WARRANTIES, AND EACH HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY

OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO BLOOMBERG BARCLAYS INDICES OR ANY

DATA INCLUDED THEREIN. BLOOMBERG RESERVES THE RIGHT TO CHANGE THE METHODS OF CALCULATION OR

PUBLICATION, OR TO CEASE THE CALCULATION OR PUBLICATION OF THE BLOOMBERG BARCLAYS INDICES, AND

NEITHER BLOOMBERG NOR BARCLAYS SHALL BE LIABLE FOR ANY MISCALCULATION OF OR ANY INCORRECT,

DELAYED OR INTERRUPTED PUBLICATION WITH RESPECT TO ANY OF THE BLOOMBERG BARCLAYS INDICES.

NEITHER BLOOMBERG NOR BARCLAYS SHALL BE LIABLE FOR ANY DAMAGES, INCLUDING, WITHOUT LIMITATION,

ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR ANY LOST PROFITS AND EVEN IF ADVISED OF THE

POSSIBILITY OF SUCH, RESULTING FROM THE USE OF BLOOMBERG BARCLAYS INDICES OR ANY DATA INCLUDED

THEREIN OR WITH RESPECT TO THE TARGET RETIREMENT FUNDS.

None of the information supplied by Bloomberg or Barclays and used in this publication may be reproduced in any manner

without the prior written permission of both Bloomberg and Barclays Capital, the investment banking division of Barclays

Bank Plc. Barclays Bank Plc is registered in England No. 1026167. Registered office 1 Churchill Place London E14 5HP.

© 2018 Bloomberg. Used with Permission.

Source: Bloomberg Index Services Limited. Copyright 2018, Bloomberg. All rights reserved.

89

The People Who Govern Your Fund

The trustees of your mutual fund are there to see that the fund is operated and managed in your

best interests since, as a shareholder, you are a part owner of the fund. Your fund’s trustees also

serve on the board of directors of The Vanguard Group, Inc., which is owned by the Vanguard

funds and provides services to them on an at-cost basis.

A majority of Vanguard’s board members are independent, meaning that they have no affiliation

with Vanguard or the funds they oversee, apart from the sizable personal investments they have

made as private individuals. The independent board members have distinguished backgrounds

in business, academia, and public service. Each of the trustees and executive officers oversees

211 Vanguard funds.

Information for each trustee and executive officer of the fund appears below. The mailing address

of the trustees and officers is P.O. Box 876, Valley Forge, PA 19482. More information about the

trustees is in the Statement of Additional Information, which can be obtained, without charge,

by contacting Vanguard at 800-662-7447, or online at vanguard.com.

Interested Trustees1

F. William McNabb III

Born in 1957. Trustee since July 2009. Principal

occupation(s) during the past five years and

other experience: chairman of the board

(January 2010–present) of Vanguard and of each

of the investment companies served by Vanguard,

trustee (2009–present) of each of the investment

companies served by Vanguard, and director

(2008–present) of Vanguard. Chief executive officer

and president (2008–2017) of Vanguard and each

of the investment companies served by Vanguard,

managing director (1995–2008) of Vanguard,

and director (1997–2018) of Vanguard Marketing

Corporation. Director (2018–present) of

UnitedHealth Group.

Mortimer J. Buckley

Born in 1969. Trustee since January 2018. Principal

occupation(s) during the past five years and

other experience: chief executive officer

(January 2018–present) of Vanguard; chief executive

officer, president, and trustee (January 2018–present)

of each of the investment companies served by

Vanguard; president and director (2017–present) of

Vanguard; and president (February 2018–present) of

Vanguard Marketing Corporation. Chief investment

officer (2013–2017), managing director (2002–2017),

head of the Retail Investor Group (2006–2012), and

chief information officer (2001–2006) of Vanguard.

Chairman of the board (2011–2017) of the Children’s

Hospital of Philadelphia.

Independent Trustees

Emerson U. Fullwood


occupation(s) during the past five years and other

experience: executive chief staff and marketing officer

for North America and corporate vice president (retired

2008) of Xerox Corporation (document management

products and services). Former president of the

Worldwide Channels Group, Latin America, and

Worldwide Customer Service and executive chief

staff officer of Developing Markets of Xerox. Executive

in residence and 2009–2010 Distinguished Minett

Professor at the Rochester Institute of Technology.

Lead director of SPX FLOW, Inc. (multi-industry

manufacturing). Director of the University of Rochester

Medical Center, the Monroe Community College

Foundation, the United Way of Rochester, North

Carolina A&T University, and Roberts Wesleyan

College. Trustee of the University of Rochester.

Amy Gutmann

Born in 1949. Trustee since June 2006. Principal


experience: president (2004–present) of the University

of Pennsylvania. Christopher H. Browne Distinguished

Professor of Political Science, School of Arts and

Sciences, and professor of communication, Annenberg

School for Communication, with secondary faculty

appointments in the Department of Philosophy, School

of Arts and Sciences, and at the Graduate School of

Education, University of Pennsylvania. Trustee of the

National Constitution Center.

1 Mr. McNabb and Mr. Buckley are considered “interested persons,” as defined in the Investment Company Act of 1940, because they are officers of the Vanguard funds.

JoAnn Heffernan Heisen



experience: corporate vice president of Johnson &

Johnson (pharmaceuticals/medical devices/consumer

products) and member of its executive committee

(1997–2008). Chief global diversity officer (retired

2008), vice president and chief information officer

(1997–2006), controller (1995–1997), treasurer

(1991–1995), and assistant treasurer (1989–1991)

of Johnson & Johnson. Director of Skytop Lodge

Corporation (hotels) and the Robert Wood Johnson

Foundation. Member of the advisory board of the

Institute for Women’s Leadership at Rutgers University.

F. Joseph Loughrey

Born in 1949. Trustee since October 2009. Principal


experience: president and chief operating officer

(retired 2009) and vice chairman of the board

(2008–2009) of Cummins Inc. (industrial machinery).

Chairman of the board of Hillenbrand, Inc. (specialized

consumer services), Oxfam America, and the Lumina

Foundation for Education. Director of the V Foundation

for Cancer Research. Member of the advisory council

for the College of Arts and Letters and chair of the

advisory board to the Kellogg Institute for International

Studies, both at the University of Notre Dame.

Mark Loughridge

Born in 1953. Trustee since March 2012. Principal


experience: senior vice president and chief financial

officer (retired 2013) of IBM (information technology

services). Fiduciary member of IBM’s Retirement

Plan Committee (2004–2013), senior vice president

and general manager (2002–2004) of IBM Global

Financing, vice president and controller (1998–2002)

of IBM, and a variety of other prior management roles

at IBM. Member of the Council on Chicago Booth.

Scott C. Malpass

Born in 1962. Trustee since March 2012. Principal


experience: chief investment officer (1989–present)

and vice president (1996–present) of the University

of Notre Dame. Assistant professor of finance at the

Mendoza College of Business, University of Notre

Dame, and member of the Notre Dame 403(b)

Investment Committee. Chairman of the board of

TIFF Advisory Services, Inc. Member of the board

of Catholic Investment Services, Inc. (investment

advisors), the board of advisors for Spruceview

Capital Partners, and the board of superintendence

of the Institute for the Works of Religion.

Deanna Mulligan



experience: president (2010–present) and chief

executive officer (2011–present) of The Guardian

Life Insurance Company of America. Chief operating

officer (2010–2011) and executive vice president

(2008–2010) of Individual Life and Disability of

The Guardian Life Insurance Company of America.

Member of the board of The Guardian Life Insurance

Company of America, the American Council of Life

Insurers, the Partnership for New York City (business

leadership), and the Committee Encouraging Corporate

Philanthropy. Trustee of the Economic Club of New

York and the Bruce Museum (arts and science).

Member of the Advisory Council for the Stanford

Graduate School of Business.

André F. Perold

Born in 1952. Trustee since December 2004. Principal


experience: George Gund Professor of Finance and

Banking, Emeritus at the Harvard Business School

(retired 2011). Chief investment officer and co-

managing partner of HighVista Strategies LLC

(private investment firm). Overseer of the Museum

of Fine Arts Boston.

Sarah Bloom Raskin



experience: deputy secretary (2014–2017) of

the United States Department of the Treasury.

Governor (2010–2014) of the Federal Reserve Board.

Commissioner (2007–2010) of financial regulation

for the State of Maryland. Member of the board of

directors (2012–2014) of Neighborhood Reinvestment

Corporation. Director of i(x) Investments, LLC.

Peter F. Volanakis



experience: president and chief operating officer

(retired 2010) of Corning Incorporated (communications

equipment) and director of Corning Incorporated

(2000–2010) and Dow Corning (2001–2010).

Director (2012) of SPX Corporation (multi-industry

manufacturing). Overseer of the Amos Tuck School

of Business Administration, Dartmouth College

(2001–2013). Chairman of the board of trustees of

Colby-Sawyer College. Member of the Board of

Hypertherm Inc. (industrial cutting systems, software,

and consumables).

Executive Officers

Glenn Booraem

Born in 1967. Principal occupation(s) during the past

five years and other experience: principal of Vanguard.

Investment stewardship officer (2017–present),

treasurer (2015–2017), controller (2010–2015),

and assistant controller (2001–2010) of each of

the investment companies served by Vanguard.

Christine M. Buchanan


five years and other experience: principal of Vanguard

and global head of Fund Administration at Vanguard.

Treasurer (2017–present) of each of the investment

companies served by Vanguard. Partner (2005–2017)

at KPMG LLP (audit, tax, and advisory services).

Brian Dvorak



Chief compliance officer (2017–present) of Vanguard

and each of the investment companies served by

Vanguard. Assistant vice president (2017–present) of

Vanguard Marketing Corporation. Vice president and

director of Enterprise Risk Management (2011–2013)

at Oppenheimer Funds, Inc.

Thomas J. Higgins



Chief financial officer (2008–present) and treasurer

(1998–2008) of each of the investment companies

served by Vanguard.

Peter Mahoney



Controller (2015–present) of each of the investment

companies served by Vanguard. Head of International

Fund Services (2008–2014) at Vanguard.

Anne E. Robinson

Born in 1970. Principal occupation(s) during the

past five years and other experience: general

counsel (2016–present) of Vanguard. Secretary

(2016–present) of Vanguard and of each of the

investment companies served by Vanguard.

Managing director (2016–present) of Vanguard.

Director and senior vice president (2016–2018)

of Vanguard Marketing Corporation. Managing

director and general counsel of Global Cards and

Consumer Services (2014–2016) at Citigroup.

Counsel (2003–2014) at American Express.

Michael Rollings

Born in 1963. Principal occupation(s) during the

past five years and other experience: finance

director (2017–present) and treasurer (2017) of each

of the investment companies served by Vanguard.

Managing director (2016–present) of Vanguard. Chief

financial officer (2016–present) of Vanguard. Director

(2016–present) of Vanguard Marketing Corporation.

Executive vice president and chief financial officer

(2006–2016) of MassMutual Financial Group.

Vanguard Senior Management Team

Joseph Brennan Chris D. McIsaac

Mortimer J. Buckley James M. Norris

Gregory Davis Thomas M. Rampulla

John James Karin A. Risi

Martha G. King Anne E. Robinson

John T. Marcante Michael Rollings

Chairman Emeritus and Senior Advisor

John J. Brennan

Chairman, 1996–2009

Chief Executive Officer and President, 1996–2008

Founder

John C. Bogle

Chairman and Chief Executive Officer, 1974–1996

P.O. Box 2600

Valley Forge, PA 19482-2600

Connect with Vanguard® > vanguard.com

Fund Information > 800-662-7447

Direct Investor Account Services > 800-662-2739

Institutional Investor Services > 800-523-1036

Text Telephone for PeopleWho Are Deaf or Hard of Hearing > 800-749-7273

This material may be used in conjunctionwith the offering of shares of any Vanguardfund only if preceded or accompanied bythe fund’s current prospectus.

All comparative mutual fund data are from Lipper, aThomson Reuters Company, or Morningstar, Inc., unlessotherwise noted.

You can obtain a free copy of Vanguard’s proxy votingguidelines by visiting vanguard.com/proxyreporting or bycalling Vanguard at 800-662-2739. The guidelines arealso available from the SEC’s website, sec.gov. Inaddition, you may obtain a free report on how your fundvoted the proxies for securities it owned during the 12months ended June 30. To get the report, visit eithervanguard.com/proxyreporting or sec.gov.

You can review and copy information about your fund atthe SEC’s Public Reference Room in Washington, D.C. Tofind out more about this public service, call the SEC at202-551-8090. Information about your fund is alsoavailable on the SEC’s website, and you can receivecopies of this information, for a fee, by sending arequest in either of two ways: via email addressed [email protected] or via regular mail addressed to thePublic Reference Section, Securities and ExchangeCommission, Washington, DC 20549-1520.

© 2018 The Vanguard Group, Inc.All rights reserved.Vanguard Marketing Corporation, Distributor.

Q3080B 112018

Documents

Vanguard Target Retirement Funds · Retirement 2045 Fund to 2.63% for the Target Retirement 2040 Fund. (The funds with target dates of 2015 through 2035, as well as the Target Retirement