How to turn retirement savings into retirement income To avoid outliving your retirement savings, it’s important to consider ways to make your money last. You’ve saved for your retirement for years. Now that it’s approaching, how will you convert your plan savings into a regular income stream to help pay your bills? Most Americans will receive Social Security, a source of regular, guaranteed income. Some will have pensions; still others may receive income from work in the early years of retirement. Vanguard has created a comprehensive program that includes products, services, and education opportunities to help you turn your retirement savings into income. Review this brochure to discover what these options can do for you. Retirement income > 1 Income strategies to meet your needs Systematic withdrawals Managed payout funds: Most retirees are likely to rely on disciplined, conservative withdrawals from their retirement savings—typically in rollover IRA accounts—as their primary retirement income strategy. To establish individual, systematicwithdrawal programs, you can use the education tools on vanguard.com or contact a Vanguard IRA® rollover specialist by phone. • Automatically generate regular monthly Managed Payout Funds “Do-it-for-me” retirees may appreciate combining investment management and a systematic-withdrawal income strategy all in one package. Vanguard Managed Payout Funds,* available to IRA investors, delegate investment and withdrawal decisions to a professional fund manager, who seeks both a reliable income stream and the potential for capital preservation and growth. payments that are set each year. • Adjust the payments each January, which could be higher or lower than the current payments, based on the performance of other funds. • Seek to lessen the impact of market volatility by combining complementary asset classes and investments. • Are designed to maintain (or grow) your investment. • Are not guaranteed to achieve their investment objectives and are subject to loss, and some of their distributions may be treated in part as a return of capital. *Vanguard owns a pending patent application for its Managed Payout Funds under U.S. Patent Application No. 2009-0076980-A1. Vanguard Annuity Access™, powered by the Income Solutions® platform If you are looking to generate a stream of guaranteed income for life, you may want to consider using part of your savings to purchase low-cost fixed income annuities (also known as immediate annuities**). You can use the Annuity Access service to make meaningful, apples-to-apples comparisons among annuity providers. 2 < Retirement income The products on this platform are institutionally priced, and the fees are available to view. Vanguard’s annuity experts can answer your questions during the decision-making process. An immediate fixed annuity may be appropriate if you: • Want a guaranteed income stream you can’t outlive. • Need more income than you may be receiving currently. • Can buy an annuity and still have money available for investing, emergencies, or unanticipated purchases. • Want funds available to help pay expenses, such as everyday bills, the cost of long-term care, or life insurance premiums. An immediate fixed annuity can complement other income sources, such as traditional pension plans or Social Security, to help ensure that you have enough income for expenses over the long term. ** Immediate variable annuities contain underlying investment portfolios that are subject to investment risk, including possible loss of principal. Guaranteed Lifetime Withdrawal Benefit (GLWB). If you are looking for guaranteed income while retaining access to your savings, you may want to consider investing in a Vanguard Variable Annuity with a GLWB rider. With the GLWB, you can enjoy savings liquidity, guaranteed lifetime income without annuitization, the opportunity to benefit from market gains, and a choice of three diversified Vanguard portfolios in which to invest. With the GLWB rider, you have greater flexibility and control of your investment. You can: • Receive guaranteed payments for life. • Be protected against investment losses due to market fluctuations. • Make additional withdrawals whenever you like (up to your maximum annual withdrawal amount). • Start, stop, or skip withdrawals at any time. Unlike immediate annuities (also known as income annuities), you don’t have to permanently surrender your investment to an insurance company in exchange for a stream of payments. Product guarantees are subject to the claims-paying ability of the issuing insurance company. Retirement income > 3 A range of services to help you decide Vanguard has several products and services that can help you develop a personal income strategy that will suit your specific needs and preferences. Rollover specialists Vanguard rollover specialists make it easy for you to move your retirement plan assets into IRA accounts. If you are ready to start taking income from your savings, these specialists can help you set up automatic installments from your IRAs into your bank checking accounts. To reach a rollover specialist, call Vanguard at 800-523-1188 any business day from 8 a.m. to 8 p.m., Eastern time. Vanguard Annuity and Insurance Services Annuities can be useful in protecting you against the risk of outliving your savings, but they can be easily misunderstood. Vanguard’s licensed annuity experts can answer your questions about annuities, guide you through the Annuity Access platform, explain the pros and cons of annuitization, and provide general education about retirement-income options. Moreover, Vanguard’s associates are not salespeople; their job is to clarify a widely misunderstood category of products. To reach a Vanguard annuity specialist, call Vanguard at 800-357-4720 any business day from 8 a.m. to 8 p.m., Eastern time. 4 < Retirement income Personal financial planning If you are age 50 or older, you are eligible for Vanguard Financial Planning Services. This service can provide you with immediate phone access to a Certified Financial Planner™ professional at Vanguard and a full financial plan at no cost. The financial plan will include an asset allocation strategy, investment recom mendations, a saving sufficiently outlook or retirement spending guidelines, and an item-by-item transaction list to reposition your portfolio. To connect with Vanguard Financial Planning Services, call 800-310-8952 any business day from 8:30 a.m. to 8 p.m., Eastern time. Vanguard Asset Management Services™ If you have investable assets of $500,000 or more, you can request a personal financial advisor at Vanguard, who can help manage your savings and income and advise you on related financial matters. Your financial advisor will: • Partner with you to build a customized investment program for any life stage. • Focus on disciplined portfolio management, rather than market noise, to help keep your investments on track. • Create a tax-efficient asset withdrawal strategy to help meet your living expenses and achieve your financial goals. • Provide resources to address more complex financial planning issues, such as estate planning, tax efficiency, charitable giving, and trust services. • Connect with you regularly through personal contact and in-depth quarterly performance reviews. To reach a Vanguard Asset Management Services specialist, call Vanguard at 800-335-2412 any business day from 8 a.m. to 6 p.m., Eastern time. Vanguard can help The decisions you make about your retirement savings are important. Take your time as you make up your mind about what course to follow. Vanguard can answer your questions about retirement income and offers a wide array of investment and planning services that can help you as you transition from work to retirement. Retirement can be a wise time to engage the services of a financial planning professional to make the most of your choices. If you have questions regarding your S&RP, contact Vanguard any of these ways: • Online. Log on to vanguard.com for 24-hour access to information about your account, your funds, and Vanguard’s financial planning and advice services. Not yet registered for immediate, secure online account access? You will need your Plan number, 091847. • By phone. Get 24-hour access to your account and information about your funds through the interactive VOICE® Network at 800-523-1188. • With personal assistance. Vanguard Participant Services associates are available to assist you with transactions and answer your questions at 800-523-1188 any business day from 8:30 a.m. to 9 p.m., Eastern time. You can learn more about generating income during retirement at vanguard.com/ retirementpaycheck. Retirement income > 5 Connect with Vanguard® > vanguard.com > 800-523-1188 All investing is subject to risk. The Vanguard Group offers annuities through nonaffiliated insurance companies. The Vanguard Variable Annuity is a flexible-premium variable annuity issued by Monumental Life Insurance Company, Cedar Rapids, Iowa (NAIC No. 66281), and in New York State only, by Transamerica Financial Life Insurance Company, Harrison, New York (NAIC No. 70688). Form No. VVAP U 1101 (in Florida, Form No. VVAP U 1101 (FL), in Oregon, Form No. VVAP U 1101 (OR) (R), and in New York VVA NY 0208). GLWB Rider Form No. RGMB 43 0811 (in Florida, RGMB 43 0811 (SI)(FL), RGMB 43 0811 (JT)(FL), in Oregon RGMB 43 0811 (SI)(OR), RGMB 43 0811 (JT)(OR), and in New York RGMB 43 0811 (SI) (NY)(REV), RGMB 43 0811 (JT)(NY)(REV)),without agent representation. Policy and rider form numbers may vary by state and may not be available in all states. The Vanguard Group administers the Vanguard Variable Annuity for the issuer. Its variable annuity and investment costs rank among the lowest in the industry, according to Morningstar, Inc., December 2011. The Vanguard Group’s home office and domicile is Valley Forge, Pennsylvania (in California, DBA Vanguard Administrators, Inc., license number 0B91453). The Vanguard Group, Monumental Life Insurance Company, and Transamerica Financial Life Insurance Company do not provide tax advice. Investors are encouraged to consult a tax advisor for information on how annuity taxation applies to their individual situations. The Managed Payout Funds are not guaranteed to achieve their investment objectives, are subject to loss, and some of their distributions may be treated in part as a return of capital. The dollar amount of a fund’s monthly cash distributions could go up or down substantially from one year to the next and over time. It is also possible for a fund to suffer substantial investment losses and simultaneously experience additional asset reductions as a result of its distributions to shareholders under its managed distribution policy. An investment in a fund could lose money over short, intermediate, or even long periods of time because each fund allocates its assets worldwide across different asset classes and investments with specific risk and return characteristics. Diversification does not necessarily ensure a profit or protect against a loss in a declining market. The funds are proportionately subject to the risks associated with their underlying funds, which may invest in stocks (including stocks issued by REITs), bonds, cash, inflation-linked investments, commodity-linked investments, long/ short market neutral investments, and leveraged absolute return investments. Please note that the Managed Payout Funds may not be appropriate for all investors. For example, depending on the time horizon, retirement income needs, and tax bracket, an investment in a Managed Payout Fund might not be appropriate for younger investors not currently in retirement, in IRAs or other tax-advantaged accounts for those investors under age 59½, or for participants in employer-sponsored plans. Investors who hold a Managed Payout Fund within a tax-advantaged retirement account should consult their tax advisors to discuss tax consequences that could result if payments are distributed from their core account prior to age 59½ or if they plan to use the Managed Payout Funds, in whole or in part, to meet their required minimum distribution (RMD) obligations. Distributions from the Managed Payout Funds are unlikely to precisely match an investor’s IRA RMD obligations. In addition, use of the Managed Payout Funds may be restricted in employer-sponsored plans by the terms of the governing plan documents and/or at the discretion of the plan administrator. Review the information carefully with your financial advisor before deciding whether a Managed Payout Fund is right for you. Before investing, consider the Managed Payout Funds’ investment objectives, strategies, risks, fees, and expenses. Contact Vanguard for a prospectus containing this information. Read it carefully. Vanguard Financial Planning Services are provided by Vanguard Advisers, Inc., a federally registered investment advisor. Vanguard Asset Management Services are provided by Vanguard National Trust Company, which is a federally chartered, limited-purpose trust company operated under the supervision of the Office of the Comptroller of the Currency. Vanguard Annuity Access is offered in collaboration with Hueler Investment Services, Inc., through the Income Solutions platform. Income Solutions is a registered trademark of Hueler Investment Services, Inc., and used under license. United States Patent No. 7,653,560. Vanguard Annuity Access is provided by Vanguard Marketing Corporation, d/b/a VMC Insurance Services in California. Participant Education P.O. Box 2900 Valley Forge, PA 19482-2900 Guarantees are subject to the claims-paying ability of the issuing insurance company. The underwriting risks, financial obligations, and support functions associated with the products are the responsibility of the issuing insurance company. The issuing insurance company is responsible for its own financial condition and contractual obligations. © 2012 The Vanguard Group, Inc. All rights reserved. BBBBFCSP 052012