If you're like most people, your retirement accounts hold far less than they should, and you probably aren't even sure how to best invest the money you have in them. Let's tackle those issues.

Here's a look at how much you might amass -- if you're invested very effectively over long periods.

A yellow road sign says retirement ahead.

Image source: Getty Images.

Growing your retirement accounts

First of all, know that no matter how much you've amassed so far, if you still have some time before you retire, you can probably grow your accounts considerably. You just have to invest those dollars effectively, and it's hard to beat the stock market for that.

Check out the table below, offering data from Wharton Business School professor Jeremy Siegel, who studied investment returns from the 1800s to recent years. He found that stocks outperformed bonds in 96% of all 20-year holding periods between 1871 and 2012, and in 99% of all 30-year holding periods. From his data, here are the average returns for stocks, bonds, bills, gold, and the dollar, between 1802 and 2012:

Asset Class

Annualized Nominal Return









U.S. dollar


Source: Stocks for the Long Run.

If you're more interested in a more relevant investment period for yourself than 210 years, know that the annualized growth rate for stocks from 1926 to 2012 was 9.6%, and that also easily beat the alternatives. That's encouraging, but the period that you're investing in may not produce such results -- you may average a 5% overall average annual gain, an 8% one, or more or less. Let's just go with 8% for now. The table below shows how much you might amass regularly saving various sums over various periods:

Growing at 8% for

$5,000 invested annually

$10,000 invested annually

$15,000 invested annually

5 years




10 years




15 years




20 years




25 years




30 years




35 years




40 years




Source: Calculations by author.

The best ETF to grow your wealth

So, given that stocks generally outperform, how should you best invest your hard-earned dollars? Well, index funds make the most sense for the most people. An index fund is a passively managed mutual fund -- one that simply holds the same securities that are in a particular index. Then its returns approximate the returns of the index itself -- provided that its fees are low. (Many index funds sport ultra-low annual fees -- often below 0.10%.)

An especially easy way to invest in various index funds is via exchange-traded funds (ETFs). They're kind of a hybrid of mutual funds and stocks, holding a variety of securities, but trading like stocks -- and allowing you to buy as few or as many shares as you want via your brokerage.

A prime candidate and one of the most popular index ETFs is the SPDR S&P 500 ETF (SPY 0.09%), which tracks the S&P 500, an index of 500 of America's biggest companies that's often used as a proxy for the whole U.S. stock market. Its holdings, together, make up about 80% of the U.S. market's overall value.

You might go beyond that, though, and opt for the Vanguard Total Stock Market ETF (VTI 0.14%), which aims to track the performance of the entire U.S. stock market -- by including the smaller companies that didn't qualify for inclusion in the S&P 500. An even broader option is the Vanguard Total World Stock ETF (VT 0.28%), which encompasses the world's stock markets.

Any of these, or a combination of them, should serve you well, growing your long-term dollars effectively.