One issue you run into a lot when you are discussing optimal savings strategies is the inability of people discussing their returns versus the S&P 500 to produce a fair comparison. They will say, for example, that the S&P 500 index was at the same level as it was at some time in the past - so therefore investing in the index was a waste of time.  Here's the key to this S&P 500 return calculator:

S&P 500 Index Return - The total price return of the S&P 500 Index. So if it is at 1000 on the start and end date, this will be 0.
S&P 500 Index Annualized Return - The total price return of the S&P 500 index (as above), annualized. This number basically gives your 'return per year' if your time period was compressed or expanded to a 12 month timeframe.
S&P 500 Dividends Reinvested Index Return - The total price return of the S&P 500 if you had reinvested all of your dividends.
S&P 500 Dividends Reinvested Index Annualized Return - The total price return of the S&P 500 if you reinvested dividends. Again, it will annualize the return given above.
Inflation Adjusted (CPI)? - Whether the calculation you did is using CPI adjusted values provided by Shiller, or showing return before inflation. Hit the checkbox above the buttons to turn on or off the inflation adjustment.