As a recovering accountant, I feel mixed emotions with the end of tax season. I’m excited about the end of six-day workweeks, but I’ll miss the positive interactions I share with the low-income families I help through the Volunteer Income Tax Assistance program in Philadelphia. Few experiences are as rewarding as seeing and hearing someone’s reaction when I tell them how much their refund will be.

Fortunately, I work on something else that I find incredibly fulfilling. So instead of saluting the end of tax season, I like to say that I’m celebrating a significant milestone in the production of How America Saves.1 We’ve wrapped up the analysis and sent the last of the copy and figures to marketing to work their magic.

While this is certainly a time to celebrate, it’s also a time I spend reflecting on the progress our plan participants are making toward their retirement goals. One bright spot is the improvement we can see in participant portfolio construction. Much of this improvement results from the widespread adoption of target-date funds (TDFs).

At the end of 2018, TDFs were offered to nearly all Vanguard plan participants—97% of our retirement savers had the option of using a TDF and 77% of all Vanguard participants were invested in TDFs.2 Most striking, and heartwarming for me, more than half of the participants we work with were solely invested in a single TDF. That’s 2.5 million retirement savers at Vanguard alone!

While I feel good about this, one metric that I do worry about is the proportion of participants who hold “extreme” portfolios. We define an extreme portfolio as one that holds either zero equities or all equities. I know that for some of you, these types of portfolios result from a well-informed and deliberate decision. You may be pursuing tax-efficient strategies, or you may believe an all-equity defined contribution (DC) portfolio is appropriate to your circumstances. But you represent the minority of participants holding extreme allocations. Among our participants, 9% hold extreme portfolios: 3% hold no equities in their retirement plan savings account, and at the other extreme, 6% are 100% invested in equities. It’s the “no equities” participants that I worry about the most.

But, one of my new favorite charts in How America Saves is what I refer to as the “frown” chart. Survey data tells us that younger investors are risk-averse.3 And our data shows that this used to play out in participant asset allocations. Hence the frown. Before the widespread adoption of TDFs, when we plotted equity allocations by age, our youngest savers had equity allocations that resembled those of our oldest savers.

Trend in asset allocation by participant age

Source: Vanguard, 2019.

But our younger participants now are most likely to use TDFs. Today their equity allocations are more in line with what we would like to see in a retirement savings account—even though they still survey as risk-averse. That’s a good thing—and an evolution we should all be proud of.

As a recovering accountant, I’m happy to be immersed in the data behind How America Saves. It’s my new busy season. And I find it heartwarming to see the dramatic improvements in asset allocation for our plan participants—especially our younger savers.

1 How America Saves is Vanguard’s annual defined contribution benchmarking publication. The 2019 edition will be available at on June 11.
2 Young, Galina, and Jean A. Young, TDF Adoption in 2018, February 2019, Vanguard research,
3 ICI Research Perspective, Investment Company Institute, October 2017, Vol. 23, No. 7; and The Cerulli Edge U.S. Asset Management and Wealth Edition, January 2018, Issue #245.


  • All investing is subject to risk, including the possible loss of the money you invest.
  • Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in the target-date fund is not guaranteed at any time, including on or after the target date.