The U.S. Postal Service recently raised the price of a first-class stamp to 82 cents. For decades the humble stamp has served as a simple proxy for inflation. With energy costs elevated amid ongoing geopolitical tensions, inflation remains front and center for investors and retirees alike.
Thirty years ago, in 1996, a first-class stamp cost 23 cents. Today’s 82-cent price represents a 2.6-fold increase. By comparison, the Consumer Price Index (CPI) rose from 157 in July 1996 to just under 334 in July 2026, an increase of roughly 2.1 times. The stamp has actually outpaced broad inflation over the past 30 years.
Equity markets tell a different story. The S&P 500’s full-year cash dividend in 1996 was $14.89. Consensus estimates for 2026 project approximately $83, a 5.6-fold rise. The index itself closed July 1996 at 635 and finished July 2026 at 7,490, an 11.8-fold gain.
These figures matter because a typical married couple entering retirement today is planning for a roughly 30-year time horizon. Looking back at the past three decades offers useful context for retirement planning, even though past performance is no guarantee of future results.
Inflation erodes purchasing power. That is why we believe every retirement plan must explicitly account for rising prices. While the S&P 500 is only one measure of the equity market, history shows that allocating a substantial portion of retirement assets to equities has been an effective way to preserve purchasing power and grow wealth over multi-decade periods.
Another important factor in retirement planning is volatility. Investors who lived through the past 30 years remember the 49% drawdown of 2000–2002, the 57% decline of 2007–2009, and the rapid 34% drop in the first 33 trading days of the COVID bear market in 2020. Those episodes underscore the importance of risk management and a well-diversified portfolio. Yet they do not erase the long-term results. We continue to believe equities should form a core holding for investors of every age. Whether you are just beginning to accumulate capital, newly retired, or already several years into retirement, equities are a critical component of your portfolio.
If these historical comparisons raise questions about your own retirement plan or portfolio allocation, we would be glad to review them with you. Aligning your strategy with both your personal goals and the lessons of long-term market data is the foundation of sound financial planning.