Note: 7% is the figure most pension funds expect. Vanguard claims that's 8, which okay, Vanguard claims it's 8. They're now claiming it's gonna be 5... meanwhile most funds have been lucky to make 3% for the past 10 years.

The reason they make you learn compound interest in Home Ec is that the difference between $10k compounding for 10 years at 5 and 10 years at 7 is the difference between getting an extra $5k or doubling your money.

In other words, if you have a 10-year horizon on your pension fund, Vanguard is telling you to expect a 50% shortfall.