Stocks vs Bonds Calculator: Growth, Risk & the 60/40 Mix

How the growth is worked out

One formula, applied twice: future value is the amount times one plus the yearly return, raised to the number of years. Stocks at 10.2% a year for 20 years are $10,000 times 1.102 to the power of 20, which is $10,000 times 6.9764, which is $69,764.08. Bonds at 4.6% are $10,000 times 1.046 to the power of 20, which is $10,000 times 2.4583, which is $24,582.93. The multiple is the growth factor itself: stocks end at 6.98 times the starting money, bonds at 2.46 times. The gap is the two endings subtracted — $69,764.08 minus $24,582.93 is $45,181.15 — and the gain is the ending minus the starting $10,000: stocks gain $59,764.08, bonds gain $14,582.93. Every other figure on this page is the same formula with one input changed: the blend uses a blended return, the real figures divide by inflation, the fee figures subtract the fee from the return, and the 10-year and 30-year figures change the exponent.

The worked example, line by line

Setup: $10,000 invested, 20 years, stocks 10.2% a year, bonds 4.6% a year, inflation 3%.

Line 1 — stocks growth factor. 1.102 to the power of 20 = 6.9764.

Line 2 — stocks ending. $10,000 × 6.9764 = $69,764.08, or 6.98× your money.

Line 3 — bonds growth factor. 1.046 to the power of 20 = 2.4583.

Line 4 — bonds ending. $10,000 × 2.4583 = $24,582.93, or 2.46× your money.

Line 5 — the gap. $69,764.08 − $24,582.93 = $45,181.15 in stocks’ favour.

Line 6 — the gains. Stocks gain $69,764.08 − $10,000 = $59,764.08; bonds gain $24,582.93 − $10,000 = $14,582.93.

Every branch, checked

60/40 blend, 7.96% a year: 60% stocks and 40% bonds blend to 0.6 times 10.2 plus 0.4 times 4.6, which is 6.12 plus 1.84, which is 7.96% a year. $10,000 times 1.0796 to the power of 20 is $46,265.53 — 4.63 times your money, between the $69,764.08 of all stocks and the $24,582.93 of all bonds. The blend gives up $23,498.55 of the stocks’ ending to buy a calmer ride.

A 2008-style year: in 2008 the S&P 500 fell 37.0% and the Bloomberg Aggregate bond index rose 5.24%. On $10,000 that is stocks $10,000 times 0.63, which is $6,300.00 — a $3,700.00 loss in one year — against bonds $10,000 times 1.0524, which is $10,524.00, a $524.00 gain. Bonds win the bad year by $4,224.00. One bad year does not overturn twenty good ones, but it is the year that makes people sell at the bottom.

After 3% inflation: divide each ending by 1.03 to the power of 20, which is 1.8061. Real stocks are $69,764.08 divided by 1.8061, which is $38,626.68 — 3.86 times your money in today’s buying power. Real bonds are $24,582.93 divided by 1.8061, which is $13,610.97 — 1.36 times. Stocks still win by $25,015.71 in real terms, but inflation takes nearly half the nominal ending off both: the $69,764.08 is worth $38,626.68 in today’s money.

Fee drag over 20 years: a 1.00% yearly fee cuts the stocks’ return to 9.2% a year, so $10,000 times 1.092 to the power of 20 is $58,137.02 — 5.81 times your money. A 0.03% index fee leaves 10.17% a year, so $10,000 times 1.1017 to the power of 20 is $69,385.22 — 6.94 times. The dear fee costs $11,248.20 against the cheap one, and $11,627.06 against no fee at all. A 1% fee sounds small; over 20 years it takes nearly a sixth of the ending.

Over 10 years: $10,000 times 1.102 to the power of 10 is $26,412.89 in stocks — 2.64 times — against $10,000 times 1.046 to the power of 10, which is $15,678.95 in bonds — 1.57 times. Stocks are ahead by $10,733.94, less than a quarter of the 20-year gap: the lead compounds, so it grows fastest in the later years.

Over 30 years: $10,000 times 1.102 to the power of 30 is $184,267.11 in stocks — 18.43 times — against $10,000 times 1.046 to the power of 30, which is $38,543.45 in bonds — 3.85 times. Stocks are ahead by $145,723.66. Ten more years nearly triples the stocks’ ending and adds only $13,960.52 to the bonds’: time is the ingredient that makes the gap enormous.

The honest flip: the year bonds win

Bonds win in the years stocks fall, and 2008 is the cleanest example: stocks down 37.0%, bonds up 5.24%. On $10,000 that is $6,300.00 against $10,524.00 — bonds ahead by $4,224.00 after twelve months. The flip is real but narrow: it takes one terrible year for stocks, and bonds only win while stocks are falling. Over the full 20 years in this comparison, stocks win by $45,181.15 even after absorbing 2008-style years into their 10.2% average — the average already includes the crashes. The honest way to use the flip is as a question about timing: if you need the money next year, bonds are the safer hold, because a 37% fall next year is a loss you cannot wait out. If you need it in twenty years, the flip is a year, not a verdict. Spreading a lump sum over months instead of investing it all at once softens the same risk — see the lump sum vs dollar-cost averaging comparison.

What the defaults assume

The defaults are long-run averages, not promises: stocks at 10.2% a year is the S&P 500’s long-run nominal return, the same basis used on this site’s gold vs S&P 500 page, and bonds at 4.6% a year is the 10-year Treasury yield in October 2026. The 2008 figures are the actual calendar-year returns: the S&P 500 fell 37.0% and the Bloomberg Aggregate rose 5.24%. The calculator assumes one constant return every year — no crashes, no booms, no sequence — so it shows the average outcome, not any real 20-year path. It counts no taxes, no new contributions, and no withdrawals: add yearly contributions and both endings rise, and the stocks’ lead rises faster. It also assumes the returns are nominal, before inflation; the real figures divide by 3% inflation a year. A different inflation rate changes the real figures but not the nominal gap.

Rounding convention, stated plainly: endings are rounded to cents — $69,764.08, $24,582.93 — and multiples to two decimals — 6.98×, 2.46×. The gap is the rounded endings subtracted, so $69,764.08 minus $24,582.93 is $45,181.15. Fees subtract from the return before compounding: a 1.00% fee on a 10.2% return compounds at 9.2%, not 10.2% minus a yearly charge.

Output · formula · meaning

Who uses this

• The young saver: invests $10,000 with 20 years ahead and learns stocks reach $69,764.08 against $24,582.93 in bonds — the long horizon is what makes the stocks’ lead worth taking.
• The near-retiree: needs the money in a few years and learns the 10-year gap is only $10,733.94 — and that a 2008-style year costs stocks $3,700.00 on $10,000 — so the shorter horizon argues for the blend or the bonds.
• The 2008-wary investor: remembers stocks falling 37% and learns bonds rose 5.24% that same year — $10,524.00 against $6,300.00 — and that the 60/40 blend at $46,265.53 is the middle path that still grows.
• The fee-conscious indexer: pays 0.03% a year and learns the ending is $69,385.22 — only $378.86 below no fee at all — while a 1.00% active fee leaves $58,137.02, a $11,248.20 penalty for the dear fund.

Accuracy & limitations

The math is exact for the numbers you enter: the future value is the amount times one plus the yearly return, raised to the number of years; the blend rate is 0.6 times the stocks return plus 0.4 times the bonds return; the real value is the nominal value divided by one plus inflation, raised to the number of years; the fee-adjusted return is the return minus the fee, compounded the same way. But the inputs carry the assumptions. The 10.2% stocks return is the S&P 500’s long-run nominal average — real 20-year stretches have come in well above and well below it, and the average already includes crashes like 2008, so no single future stretch will match it exactly. The 4.6% bonds return is the 10-year Treasury yield in October 2026, a snapshot, not a 20-year average: a bond fund’s return moves as yields move, and a bond held to maturity returns its yield while a bond fund’s price falls when yields rise. The 2008 figures are the actual calendar-year returns for the S&P 500 (−37.0%) and the Bloomberg Aggregate (+5.24%), but one year is not a distribution — other bad years were milder, and some years bonds fell alongside stocks. Inflation at 3% is an assumption, and a higher inflation rate shrinks both real figures without changing the nominal gap. The calculator counts no taxes, no contributions, and no withdrawals, and it assumes the return is the same every year, so it shows the average outcome, not the path. No studies or statistics are cited on this page beyond the three figures named above, because none are needed: every figure is arithmetic on the numbers you enter.