Nov 3, 2026

The S&P 500 Then vs. Now: What Slower Growth Means for Future Retirees

The stock market's had an incredible decade -- but it won't last forever.

If you’ve been invested in the S&P 500 over the past decade, you might have a distorted view of what the stock market actually returns.

Unfortunately, future retirees expecting the same type of growth over the coming decade might be in for a disappointment.

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S&P 500 Performance From 2016 to 2026

Through mid-July 2026, data from Total Real Returns shows that the S&P 500, with dividends reinvested, returned an annualized 15.11% over the past 10 years. That means that a dollar invested a decade ago more than quadrupled.

Certain individual years provided even more explosive growth. In 2021, 2023 and 2024, for example, the S&P 500 returned 28.73%, 26.18% and 24.89%, respectively. True, 2022 was a rough year, with the index dropping 18.18%. But overall, the last 10 years have been one of the best-performing stretches in market history.

The problem is that the long-term average return of the S&P 500 is closer to 10% annually, not 15%. If you use that 15% figure in your retirement calculator, you might come up well short of where you think your future nest egg will be.

Why the Next Decade Almost Certainly Won't Repeat This

Even a 10% average annual return going forward would disappoint some investors after the incredible bull run from 2016 to 2026. But some well-respected firms see even gloomier days ahead.

Vanguard's most recent capital markets outlook, for example, forecasts average U.S. stock returns of just 4% to 5% annually over the next five to 10 years. The reasoning behind this dim forecast is the high valuations assigned to large-cap technology stocks, which have had an incredible run over the past decade. When a stock's price has grown up faster than its earnings, there's less room left for the price to keep running.

This doesn’t mean a crash is necessarily coming. In fact, bull markets are known to overshoot on the upside, meaning there could be years of outsized gains yet to come. But there’s no denying that on a historical basis, the past decade was unusually strong.

What a 10-Point Gap Actually Does to Your Retirement Number

If you invest $100,000 for 20 years at 15% annually, you’ll end up with roughly $1.6 million. But if you invest that same $100,000 at 4.5% annually, your account will be closer to $241,000.

That’s a stark, life-changing difference. If you’re anticipating retiring with $1.6 million but only end up with about $241,000, your retirement will be drastically different. In the first scenario, you could potentially retire and enjoy a fairly extravagant lifestyle. In the second, you might have to pick up a side gig or drastically cut your spending just to make ends meet.

What To Actually Do With This

The only thing certain about the markets is that no one can accurately predict their performance. While it makes logical sense that Vanguard’s lower-return scenario might prevail, there’s no telling if the market will post another decade of extraodrinary gains, defying all expectations.

In this scenario, abandoning stocks entirely would be just as extreme as leveraging up your portfolio to get maximum exposure. The best strategy is to simply stick with the time-tested principles of building wealth:

Diversify your portfolio; be especially wary of an overconcentration in high-flying, large-cap tech
Increase your savings rate
Invest consistently, whether markets are up or down

Perhaps most importantly, if you’re running retirement projections based on the S&P 500 returns over the past decade, be cautious. Compare the results of your calculation with the more modest ones suggested by firms like Vanguard. The next decade is not obligated to look like that last one, and being prepared for either eventuality makes for good financial planning.

This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.

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Written by

John Csiszar

After serving for over 15 years as a financial advisor and CFP, John shifted his attention to writing in 2009. In addition to posting tens of thousands of online articles, he has also written five educational books for teens.

Edited by

Zuri Anderson

Zuri is an editor with over 8 years of digital content and news experience. When she's not managing her freelance writers, voraciously editing copy and coming up with engaging stories, she's catching up on her favorite shows, books, movies and video games.