S&P 500 Average Annual Return by Decade

The short answer

Here are the S&P 500's annualised returns for each recent decade, as total returns with dividends reinvested, before inflation:

• 1980s — 17.34% a year
• 1990s — 18.05% a year
• 2000s — −0.95% a year
• 2010s — 13.44% a year
• 2020s — 14.92% a year so far (2020–2025, still in progress)

Two strong decades, one negative decade, then another strong one. No single figure describes “normal” — which is exactly the point.

Returns by decade

Annualised (geometric) total return, dividends reinvested, nominal — not inflation-adjusted:

*The 2020s are an incomplete decade; the figure is a partial, still-moving average through 2025 and will change as the decade finishes.

These are annualised figures — the single steady rate that would produce the decade's actual growth. That is different from simply averaging the ten yearly returns, which overstates the result; the gap between the two is explained in CAGR vs average annual return.

Price return, total return and inflation

The single figure quoted for a decade hides three separate decisions: whether dividends are counted, whether inflation is removed, and which years are included. Those decisions move the answer far more than most people expect. Here are all three columns side by side, for the same decades:

*2020–2025 only; the decade is unfinished. All figures annualised (geometric) and computed as described in Sources & method.

Three things fall out of this table that the headline numbers alone will not tell you:

• Dividends are not a rounding error. In the 1980s, reinvested dividends added 4.75 percentage points a year — more than a quarter of the total return. Their contribution has shrunk steadily since, to 1.59pp in the 2020s so far, as dividend yields fell; that is why price-only and total-return series have drifted closer together in recent decades. If a figure you read elsewhere looks low, check whether it excludes dividends.
• Inflation changes the ranking, not just the level. The 1980s look like the second-best decade on total return but fall behind the 1990s in real terms, because 1980s inflation ran 5.10% a year against the 1990s' 2.93%. The 1970s are the sharpest case: 5.92% a year nominal reads as a mediocre-but-positive decade, yet with inflation at 7.36% it was a losing decade in purchasing power, at −1.35% a year.
• The lost decade was worse than −0.95%. After inflation the 2000s cost investors 3.39% a year — roughly 29% of purchasing power over the ten years, even with every dividend reinvested.

The lost decade

The 2000s stand out as the one negative decade in this set. Even with dividends reinvested, the S&P 500 returned −0.95% a year from 2000 through 2009 — the combined effect of the dot-com crash of 2000–2002 and the 2008 financial crisis. Someone who invested a lump sum at the start of 2000 was still slightly behind, in nominal terms, ten years later.

It is a useful counterweight to the strong decades on either side. The 1990s before it and the 2010s after it both returned well into double digits, yet the decade between them lost money. That is why a single decade — good or bad — is a poor guide to the next one.

The long-run average

Zoom out and the swings smooth considerably. Over the full 1928–2025 span of the underlying dataset, the S&P 500 returned 10.02% a year in nominal terms with dividends reinvested. Measuring instead from 1957 — the year the index took its modern 500-stock form — gives 10.59% a year through 2025. Set against CPI-U inflation over the same spans (3.04% and 3.64% a year respectively), the long-run real total return works out at roughly 6.8% and 6.7% a year. Strip the dividends out and the picture changes sharply: price-only, the index compounded at just 6.27% a year from 1928 to 2025.

You will see slightly different long-run headline figures elsewhere — 10.2%, 10.5%, sometimes higher. Those gaps come from the start year, whether dividends are reinvested monthly or annually, and which vendor's series is used, not from any disagreement about what happened. The numbers on this page are the ones this page's own arithmetic reproduces from the datasets named below.

But that 10% is an average across a century, not a rate you should expect in any given decade. As the table shows, actual decades have ranged from slightly negative to roughly 18% a year. The longer your horizon, the closer your own experience tends to land to the long-run figure — which is the core reason time in the market matters, as covered in how compound interest works.

How to read these numbers

• They are nominal. Inflation is not removed; real returns are lower, and were far lower in high-inflation decades.
• They include dividends. Reinvested dividends are a large part of the total — price-only returns are meaningfully lower.
• They are annualised, not averaged. This is the compound rate, which is the honest way to describe multi-year growth.
• They are backward-looking. Every figure here is history; none is a prediction.

What it means going forward

The most important thing this data shows is range, not a target. Decade returns have swung from −0.95% to 18.05% a year, and the 1990s and 2000s — back-to-back — were opposite extremes. Anyone claiming to know the next decade's figure is guessing.

Some major institutions currently forecast more modest returns over the coming decade than the recent past delivered, citing high valuations; others are more optimistic. Rather than pick a side, the practical move is to test your own plan against a range of rates — a cautious one and a hopeful one — in the investment growth calculator, and see how much the outcome depends on the assumption.

Sources & method

Every figure on this page is computed here from two published datasets rather than copied from a summary. The method is deliberately plain so you can reproduce it:

• Annualisation. Each decade figure is the geometric annualised return — the single steady rate that reproduces the decade's actual compounded growth — not the arithmetic mean of the yearly returns, which is always higher. Formally, the product of (1 + annual return) raised to the power 1/n, minus 1.
• Total return compounds annual S&P 500 returns including reinvested dividends. Price-only return is computed from year-end index levels alone, ignoring dividends entirely.
• Inflation is measured December to December on CPI-U, so a decade's inflation figure spans December of the year before it began to December of its final year — the same window as the return it sits beside.
• Real return uses the exact relation (1 + nominal) ÷ (1 + inflation) − 1, not the nominal-minus-inflation shortcut, which drifts by a few tenths of a point at these rates.
• All arithmetic is carried at full precision and rounded only for display, which is why a row may not appear to reconcile in the last decimal place.

Data sources:

• Annual S&P 500 total returns (1928–2025) and year-end index levels (1927–2025): Aswath Damodaran, NYU Stern School of Business, Historical Returns on Stocks, Bonds and Bills: 1928–Current.
• Inflation: U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPI-U), U.S. city average, all items, series CUUR0000SA0, December values, retrieved through the BLS public data API.
• For the index itself and its construction rules, see S&P Dow Jones Indices, which publishes the S&P 500 methodology and its own official total-return series.

Decade figures published by commercial data aggregators typically sit within about 0.2 percentage points of the ones here; the differences come from dividend-timing assumptions and index-level vendor, not from any dispute about history. Figures last verified 8 September 2026, covering complete calendar years through 2025. The 2020s row will move as the decade finishes.

Frequently asked questions

The bottom line

By decade, the S&P 500's annualised total return ran 17.34% in the 1980s, 18.05% in the 1990s, −0.95% in the 2000s, and 13.44% in the 2010s, with the 2020s at 14.92% so far — all nominal, dividends reinvested, computed from the NYU Stern (Damodaran) historical returns dataset. The long-run average is 10.02% a year (1928–2025), about 6.8% after inflation, but no single decade looks like the average. Use the range to stress-test your own plan rather than banking on any one figure repeating.

Model your own assumptions in the investment growth calculator, and see why annualised returns differ from simple averages in CAGR vs average annual return.