Want $1 Million in Retirement? 9 Simple Index Funds to Buy and Hold for Decades -- Including the Vanguard S&P 500 ETF
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You might want to mix and match some of these funds -- for a mix of growth and income.As you save and invest for retirement, perhaps aiming for $1 million, be sure to invest your hard-earned dollars effectively. Take on too little risk, and you'll likely end up with a slow-growing portfolio. Take on too much risk -- such as with penny stocks or by day-trading or investing on margin -- and your portfolio might shrink instead of growing. Consider parking some or most of your long-term dollars in index funds. They can make life easy, as you won't have to study the universe of stocks (and/or bonds), making buy-and-sell decisions. Instead, just keep adding money to one or more index funds and let their holdings do the work of growing for you over many years, if not decades. Image source: Getty Images. How money grows The stock market has averaged annual returns of nearly 10% over several decades. But over your investing period, it could well average more -- or less. So the table below shows how your money could grow at several different growth rates: Investing $1,000 monthly for Growing at 8% annually Growing at 10% annually Growing at 12% annually 5 years $70,399 $73,261 $76,234 10 years $173,839 $191,249 $210,585 15 years $325,825 $381,270 $447,357 20 years $549,144 $687,300 $864,629 25 years $877,271 $1,180,165 $1,600,006 30 years $1,359,399 $1,973,928 $2,895,992 35 years $2,067,802 $3,252,292 $5,179,962 40 years $3,108,678 $5,311,111 $9,205,097 Source: Calculations by author, using Investor.gov. You can see that amassing a million dollars is very achievable, as long as you have enough time and can regularly sock away some meaningful sums. You might even amass $2 million or more -- and for many people, that's a more appropriate nest egg to shoot for, especially if retirement is decades away. (It's smart to take some time to figure out how much you'll need for retirement -- and how you'll get it. Each of us needs a solid retirement plan.) Nine index funds to consider Here are nine promising index funds, in exchange-traded fund (ETF) form. ETFs are funds that trade like stocks.Advertisement ETF Recent dividend yield 5-Year Avg. Annual Return 10-Year Avg. Annual Return 15-Year Avg.
Annual Return Vanguard S&P 500 ETF (VOO) 1.12% 14.91% 14.76% 14.17% Vanguard Total Stock Market ETF (VTI) 1.11% 13.69% 14.24% 13.71% Vanguard Total World Stock ETF (VT) 1.67% 11.42% 11.66% 10.02% Vanguard Total Bond Market ETF (BND) 3.78% (0.38%) 1.92% 2.36% Schwab US Dividend Equity ETF (SCHD) 3.74% 8.56% 11.46% N/A Schwab US Large-Cap Growth (SCHG) 0.36% 16.97% 18.18% 16.72% VanEck Semiconductor ETF (SMH) 0.30% 28.96% 31.04% 24.33% Technology Select Sector SPDR ETF (XLK) 0.53% 19.89% 22.53% 19.50% Vanguard Information Technology ETF (VGT) 0.41% 18.99% 22.71% 19.62% Source: Morningstar.com, as of December 9, 2025. Each of these funds tracks a different index. The Vanguard S&P 500 ETF (VOO 0.01%), for example, tracks the S&P 500 index of 500 of America's biggest companies. The Schwab US Dividend Equity ETF tracks the Dow Jones U.S. Dividend 100 index. ExpandNYSEMKT: VOOVanguard S&P 500 ETFToday's Change(-0.01%) $-0.07Current Price$626.80Key Data PointsDay's Range$624.62 - $630.5652wk Range$442.80 - $634.13Volume236K Which funds are best for you? You may be tempted to put much of your money in the funds with the fattest returns. But think twice before doing so. If there's a stock market correction or crash, growth stocks will likely fall harder than other stocks. Remember, too, that some of the funds above are rather concentrated. The S&P 500 fund, for example, has fully 40% of its total value in just its top 10 holdings, and recently, about 8.5% in just Nvidia stock. That will serve the fund well (and has!) as long as Nvidia is going up. Note, too, that the dividend yields vary widely. If you're looking for income, which is a solid goal, you won't get much from more growth-oriented funds. You might do well spreading your dollars across several funds such as the ones above. I included a well-regarded bond fund, as well, if you'd like some exposure to bonds. Whatever you do as you aim for a million dollars by retirement, be sure to have a plan and to stick to it.About the AuthorSelena Maranjian is a contributing personal finance and investing expert at The Motley Fool. Selena has produced The Motley Fool’s nationally syndicated newspaper feature since 1997. She is the author of The Motley Fool Money Guide and Investment Clubs: How to Start and Run One the Motley Fool Way, and the co-author of The Motley Fool Investment Guide for Teens and several editions of The Motley Fool Investment Tax Guide. Prior to The Motley Fool, she worked as a high school teacher and public opinion analyst. She holds a master’s degree in teaching from Brown University and a master’s degree in finance from the Wharton School of the University of Pennsylvania.TMFSelenaRead NextDec 15, 2025 •By Neil PatelThe Smartest Vanguard ETF to Buy With $1,000 Right NowDec 15, 2025 •By Trevor JennewineWarren Buffett Says Buy This Vanguard Index Fund -- It Could Turn $400 Per Month Into $835,000 With Help From Nvidia, Apple, and MicrosoftDec 12, 2025 •By David Jagielski, CPANew to Investing?
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