If you want to invest in the stock market with little time and effort, a good strategy can be to simply “buy” the S&P 500 (^GSPC -0.50%). This benchmark index includes 500 of the biggest U.S. companies, and it’s a popular choice for many investors.

While you cannot invest in the S&P 500 directly, index funds that track its performance are widely available. Below, I’ll look at what kind of returns the index has historically averaged and how it has performed recently to build out a forecast of what a $20,000 investment in the S&P 500 might be worth after 20 years.

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The S&P 500 boasts a 10% annual return, but can that continue?

If you look at nearly a century of historical data, the S&P 500 has enjoyed an annualized growth rate of about 10% (including dividends). For 2025, it’s up 14% as of this writing, and that’s with the index already coming off strong years when its total return was more than 25% in both 2023 and 2024. The index has effectively been punching well above its weight for a while, which is why some analysts and investors worry the market may be in a bubble, and a slowdown may be coming.

For that reason, it’s important to brace for lower, more modest gains in the future. New investors may have become accustomed to these elevated returns, but the reality is there have been no shortage of years when the index’s returns have been in the single digits or even negative.

The good news is that regardless of what happens in any single year, over the long term, the S&P 500 is likely to rise in value. That’s why tracking it with an exchange-traded fund (ETF) such as the SPDR S&P 500 ETF (SPY -0.49%) can be a winning strategy.

What could a $20,000 investment in the S&P 500 be worth in the future?

I’m not going to try to predict the exact rate of return the S&P 500 will deliver over the next two decades. But I can show you what a $20,000 investment in the SPDR ETF may be worth at various points over the next 20 years based on a range of growth rates.

Data source: Clculations by author.

Even at 8%, the value of your position can more than quadruple after 20 years to about $93,000. And you shouldn’t expect 11% or 12% annualized returns going forward, especially given the S&P 500’s hot streak in recent years. However, I included those bullish growth rates to illustrate how significant the gap in the final investment value can be, even when the difference is only a few percentage points.

This highlights why it’s important to go with a low-cost fund such as the SPDR S&P 500 ETF, where the expense ratio is only 0.09%. It’s crucial to keep those fees as low as possible so you can maximize your returns.