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I have seen charts like this one DJIA returns showing the return for the past 100+ years cited as evidence why one should invest in stocks for their retirement. I don't disagree with that, but realistically, nobody invests for 110 years; my guess is that they actually invest for 20-30 years on average (for those who actually have a retirement account).

Also, it's not advised to try to play the market by investing in individual stocks, but rather mutual or index funds, so nobody can actually invest in "the stock market", but rather some subset of stocks.

So if I were making a case for someone to invest their retirement money in the stock market on a long-term basis, I would want to show them historical returns for popular consumer-grade funds over 20-30 year periods. The Dow over 110 years doesn't really tell me what an average investor's returns might look like (I understand that past performance is not indicative of future performance, but this is the whole reasoning behind looking at a chart of historical returns).

Has anyone crunched the numbers on this and published the charts and figures?

Edit: The wikipedia article notes that "[t]he first retail index fund, First Index Investment Trust, was formed in 1976...", so it looks like mutual fund investing by the average Joe could only have been done since then. Which makes the 100-year charts even more irrelevant.

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There are a few important things you need to consider when planning your retirement.

1. Risk tolerance.

You cannot invest only in stocks, whether indices or individual stocks. Even the most risk loving investors will get stressed out when their lifetime savings drop 10% over a week amidst some market volatility. It is usually best to put a portion of the money into bonds or other fixed income assets. They usually have much lower yields than stocks so it will bring down the yield of the entire portfolio. How much to put into bonds and how much into stocks depends on your risk preference and how old you are. The older you get the more you should allocate into fixed income assets.

2. Inflation.

Inflation will eat up a lot of your savings over the course of your life. Not much can be done about it. Stocks are usually more resistant to inflation so having a decent position in stocks helps.

3. Hidden costs of index funds/ETFs

ETF and index providers sometimes try to hide some costs like annual fees, commissions for good performance, dividends etc. It is very important to look thoroughly into the costs of the fund you are going to invest in.

So if you build a balanced portfolio of stocks (index funds) and bonds, and the broker charges are either very low or free, then your annual returns on average should be around 3-5% depending on inflation. 4% is the rough estimate of returns you can get on a portfolio that is mostly composed of index funds. There are tons of literature out there, but most legitimate sources converge on the number 4%.

Here is an article from a good practical blog about retirement that I came across recently: http://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/. It has been featured on the Wall Street Journal so it seems quite credible.

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