Originally published at 4:13 p.m., this story was updated after

TheStreet.com

reached John Bogle by phone while he was vacationing in upstate New York.

* * * * *

Vanguard's Senior Chairman John Bogle, who the company says will be subject to its rule requiring directors to retire at 70, says he has "mixed emotions" about the company's intention to follow that rule.

"There is certainly an argument that the creator of a company deserves a tad of extra consideration," said Bogle, who founded Vanguard in 1975. "Let's just say that everybody has their own way of expressing their gratitude."

In an interview with

TheStreet.com

this afternoon, Bogle says that while general guidelines for a retirement age may be useful, sticking by a hard and fast rule is less so.

"Writing a rule and slavishly following it makes no sense in this area any more than any other," Bogle said.

The mutual fund giant confirmed Thursday that Bogle, who turned 70 on May 8 and still keeps an office at Vanguard, will retire from its board at the end of the year. That move conforms with Vanguard's retirement policy, which dictates directors step down at the end of the calendar year in which they turn 70.

Bogle says he will still be working at Vanguard.

"I have no intention or interest in retiring," said Bogle, who returned a call to TheStreet.com while vacationing in upstate New York. "I'm going to stay working at Vanguard for an indeterminate period of time. Certainly, I expect to, for some period of years."

The news of Vanguard's pushing Bogle off its board follows reports in

Institutional Investor

and

The Wall Street Journal

of increased tension between Bogle and Vanguard's chairman, Jack Brennan, over the way the second-largest mutual fund company is being run, including its recent foray into the discount brokerage business. Brennan was on vacation and could not be reached for comment, the company said. Bogle declined to comment on his current relationship with Brennan.

"Whether I stay on the board or not is up to the directors," Bogle says. "That's, of course, their decision."

Vanguard spokesman John Demming says simply that Vanguard's board is following the policies that have guided it for years.

"Vanguard's board of directors has had a long-standing policy that stipulates that board members retire in December of the year they turn 70," Demming says. "Mr. Bogle turned 70 in May of this year and will step down at year end from the board."

But Vanguard watchers were critical of the move.

"I think it's a huge mistake on Vanguard's part," says Dan Wiener, the publisher of the

Independent Adviser for Vanguard Investors

newsletter. "Jack Bogle is the personification of Vanguard. He is the Jack at Vanguard."

Wiener said Vanguard could easily make an exception to its retirement rule for its founder if it wanted to.

"Corporate boards make corporate policy and if the board wanted to change the policy, it could," Wiener adds. "I don't think anybody would think twice about Jack Bogle staying on. The guy created Vanguard."

When mutual fund directors should be forced to retire is an issue that has been reviewed this year by both the Securities and Exchange Commission and the Investment Company Institute, the mutual fund industry's trade group.

Vanguard's board will next meet in September.

Bogle revolutionized the mutual fund industry by popularizing the concept of index funds, and the company's assets under management mushroomed under that vision. The company now manages around $500 billion, second only to

Fidelity Investments

.

But Vanguard has been taking in new assets at a much faster pace than Fidelity in recent years, and many industry watchers believe its

(VFINX) - Get Report

Vanguard 500 Index fund will soon wrest the title of world's largest mutual fund away from Fidelity's

(FMAGX) - Get Report

Magellan.

In an April interview with

TheStreet.com

at Vanguard's Malvern, Pa., campus, Brennan downplayed any philosophical or managerial differences between himself and Bogle.

"We have a lot of common values, which is the most important thing," Brennan said in his third-floor office at Vanguard's Victory building (all buildings at Vanguard's nautically themed headquarters are named for

famous ships). "We have similarities, most importantly in terms of loving this business, which is very important for the chairman of the company."

When asked about Vanguard's entry into the brokerage business, a reported point of contention between the two men, Brennan said at the time, "It's an important ... service to us, but it's never going to be a lead service for us."

Asked how he's different from Bogle, Brennan said, "We're different in sort of outward ways, in that I like mucking it up and being in the midst of the business, and Jack's more prone to create controversy and that kind of thing."

Told of Brennan's comments Thursday, Bogle responded in kind.

"I created a company. I don't think I created controversy," Bogle said.

Indeed, Bogle has been an outspoken critic of the mutual fund industry for years. His crusade has been well documented, most notably in Robert Slater's book

John Bogle and the Vanguard Experiment: One Man's Quest to Transform the Mutual Fund Industry

.

But even in April, when asked how Vanguard would change if Bogle were absent, Brennan gave an answer that suggested he had already considered that possibility.

"Well you know,

Bogle's influence has been minimal for a number of years, and as someone said, Vanguard is so much bigger than just one person -- in the best sense," Brennan said.

Bogle stepped down as chief executive at Vanguard in 1996, and gave up his chairman title in early 1998, assuming the more removed role of senior chairman. Still, he has been active on the speaking circuit, espousing his views on the mutual fund industry. He said he started his career in the mutual fund industry in 1949, after reading an article about mutual funds in Fortune magazine. It was from that article that he based his idea for his senior thesis at Princeton University.

Bogle's being forced to retire from the board of the company he founded drips with irony.

He started Vanguard in 1975 after being fired from

Wellington Management

, another company which he had helped transform into an industry leader among asset management firms.

On Thursday, he lamented the latest chapter in his 50-year long career.

"This is not a particularly easy time," he said. "And probably the less I say about it, the better."