Vanguard announced it will add a new fund to its Target Retirement Funds in 2012. It also plans to merge its Vanguard Target Retirement 2005 Fund and its Vanguard Target Retirement Income Fund, since their asset allocations have become nearly identical. The Target Retirement Funds are designed to reach an allocation of 65 percent bonds, 30 percent stocks and 5 percent short-term reserves within seven years after their target date. The 2005 Fund will be closed to new investors, effective immediately.

Vanguard filed a registration statement with the U.S. Securities and Exchange Commission for the Vanguard Target Retirement 2060 Fund, which is aimed at investors who plan to retire and leave the workforce in or within a few years of 2060. At the time the fund is launched in early 2012, those investors will be 18 to 20 years old.

"The availability of a comprehensive lineup of Target Retirement Funds is important to our investors, particularly our retirement plan clients who want these funds available for every age group of their employee population," said Vanguard CEO Bill McNabb. "The addition of the 2060 Fund meets the needs of young investors just entering the workforce. Understandably, they may not yet be thinking about retirement savings, but even setting aside a small amount now in a low-cost, balanced portfolio can make a big difference in their future financial security."