What Is a Good Annual Investment Return?

When planning for retirement, your expected return is the variable that changes your final outcome the most. But what number is actually realistic?

Historical Averages

• S&P 500: Historically ~10% annual average before inflation.
• Bonds: Historically ~4-5% annual average.
• Real Estate: Historically ~3-4% annual average + potential appreciation.

The Inflation Factor

A 10% return sounds great, but inflation historically averages around 3%. To see your real purchasing power growth, you should use a "real" return of ~7% in your calculations.

The Impact of Fees

A 1% investment fee might sound small, but over 30 years, it can eat up to 25% of your final portfolio value. Always opt for low-cost index funds when possible.

Calculate your portfolio growth with our Investment Return Calculator.