In the five years to September 2026, VOO returned 13.8% a year and SPY returned 13.7%, dividends reinvested. VOO and SPY hold the same companies in the same proportions. The one difference you can know in advance is the fee, and the simulation shows how much of a retirement plan that fee is worth.
For a representative saver about twenty years from retirement, investing in a taxable account: In this situation, VOO and SPY come out about even. Neither their known costs nor their last five years change the plan's success rate enough to matter.
With only the known costs — the same market for both funds, differing by fees and dividend tax — the money lasted in 98.3% of 10,000 simulated futures with VOO and 98.3% with SPY. Using each fund's own returns from October 2021 to September 2026 instead, the figures were 98.3% and 98.3%. Both funds were run against the identical sequence of market shocks.
The fee is the whole known difference. SPY charges more each year than VOO for the same index. Over decades a fee compounds, but at these levels the gap is small enough that the known-cost result above is the honest measure of it.
What SPY is built for. SPY trades in far larger volume and has the deepest options market of any fund. That matters to traders moving in and out during the day. A long-term holder pays for it in the fee and gets nothing back.
VOO tracks the S&P 500 — it holds the 500 large US companies in the index, weighted by size. SPY tracks the S&P 500 — it holds the 500 large US companies in the index, weighted by size.
VOO charges 0.03% a year and yields 1.06%; SPY charges 0.09% and yields 0.99%.
Returns and volatility are measured from monthly returns with dividends reinvested over 60 months — one sample from one market, and weak evidence for telling two broad funds apart, which is why the known-cost result is reported first. Dividends are taxed at 15% in a taxable account by default, the qualified rate most households pay; the page also shows the 0% and 20% brackets. It is the only tax modeled. A 3.8% net investment income tax can also apply to dividends once modified adjusted gross income passes $200,000 ($250,000 joint); it is not included. Retirement spending is held at 70% of income in today's dollars, and contributions exclude any employer match.
For holding for decades, VOO costs less for the same index. Whether that lower fee changes your plan by a measurable amount is what the simulation above answers.
Not in a taxable account if it means realizing a large capital gain: the tax today can outweigh years of fee savings. In an IRA or 401(k), switching costs nothing in tax.