Do you have Admiral Shares of Wellesley? If not, if you don't have a capital gain built up in Welly, I think it is a no-brainer to move to the Vanguard Target Retirement Income fund.
Here is why I would make the decision:
Expense ratio (assuming non-admiral shares): TR: .19% Well: .25%
Current Yield: TR: 4.03% Well: 4.79% (so, both get close to the magic 4%)
Asset mix:
TR: 70% bonds/30% stock
Bonds diversified into 20% tips, 45% total bond, 5% prime money market
Bond average credit quality: AAA (95% rated A or above)
Stock: 24% Total US, 6% international and emerging mkts
Average market cap: $27b (smaller market cap, so less stock allocation needed for equity returns)
Well: 63% bonds/37% stock
Bonds un-diversified: 294 bonds
Bond average credit quality: AA (85% rated A or above)
Stock: only 52 stocks! (non-diversified)
Average market cap: $46.5b
Returns: (to aug-31)
TR: 3-year pre-tax: 4.4%
Well: 3-year pre-tax: 4.23%
TR: 3-year post-tax: 3.05%
Well: 3-year post-tax: 2.62%
So, even in tax-efficiency, TR Income beats out Wellesley.
Trailing Returns, 1-yr to today:
TR: -4.23%
Well: -6.72%
Personally I know what choice I would make, mainly due to the lower credit quality of Wellesley, the smaller market cap of TR Income and the more diversification TR Income offers. But it is your judgement call!
If you want to compare all the stats:
Vanguard Target Retirement Income Report (VTINX) | Snapshot
Vanguard Wellesley Income Report (VWINX) | Snapshot