How Long Will $500,000 Last in Retirement?
Half a million dollars is a common retirement balance, and a common worry: is it enough to last? The answer comes down to how much you take out each year and what the money earns while it sits invested. At a modest withdrawal it can last the rest of your life. At a high one it can be gone in a decade. This guide lays out the numbers so you can see where your plans fall.
The quick answer
If you withdraw $20,000 a year and raise it with inflation, $500,000 is likely to last for life on a balanced portfolio. That is the 4% rule in action. At $30,000 a year it lasts roughly 23 to 35 years depending on returns, and at $40,000 a year roughly 16 to 19 years.
The table below shows how long $500,000 lasts at different yearly withdrawals, with returns measured after inflation so the withdrawals keep their buying power.
| Yearly withdrawal | 0% real return | 3% real return | 4% real return | 5% real return |
|---|---|---|---|---|
| $20,000 | 25 years | about 46 years | lasts indefinitely | lasts indefinitely |
| $25,000 | 20 years | about 30 years | about 39 years | about 78 years |
| $30,000 | about 17 years | about 23 years | about 27 years | about 35 years |
| $40,000 | about 13 years | about 16 years | about 17 years | about 19 years |
| $50,000 | 10 years | about 12 years | about 13 years | about 14 years |
The 0% column is what happens if the money sits in cash that only keeps up with inflation. It shows how much work investment growth does: at $25,000 a year, earning 4% after inflation nearly doubles how long the money lasts.
Add Social Security and it goes much further
For most people $500,000 is not their only income. The average retired-worker Social Security benefit is a little over $2,000 a month in 2026, about $24,800 a year. Combine that with a $20,000 withdrawal and a single retiree has nearly $45,000 a year before tax, with savings likely to last for life. A couple with two benefits might have $60,000 or more.
Viewed this way, the question becomes how big a gap your savings must fill. If you need $50,000 a year and Social Security provides $25,000, $500,000 covering the remaining $25,000 lasts about 30 to 40 years at moderate returns, which is enough for most people retiring at 65 or later.
Retiring early on $500,000
Retiring at 55 or earlier is harder, because there are years before Social Security begins when savings must do all the work. A good approach is to treat it as two phases: a bridge period when you draw more heavily, and a later period when Social Security covers most of your needs and withdrawals drop. Claiming Social Security later raises the benefit for life, which can make the bridge worth it. The early retirement bridge calculator works through this.
What history says about $500,000
The table above assumes the same return every year, which markets never deliver. To see how real ups and downs change the answer, we ran $500,000 through every starting year in US market history since 1928, using actual yearly returns for the S&P 500 and 10-year Treasury bonds, real inflation, a 60/40 mix of stocks and bonds and 0.1% in fees. Each year’s withdrawal starts at a set share of the starting balance and then rises with inflation.
| First-year withdrawal | Share of $500,000 | Lasted 30 years | Worst case |
|---|---|---|---|
| $20,000 | 4% | 93% of start years | ran out in year 25 (1966 start) |
| $25,000 | 5% | 70% of start years | ran out in year 18 (1966 start) |
| $30,000 | 6% | 52% of start years | ran out in year 14 (1973 start) |
A 4% withdrawal, $20,000 a year, survived 30 years in 64 of the 69 periods tested. Raising it to $30,000 turns retirement into something close to a coin toss, with the worst outcomes coming from retirements that began just before the high inflation and weak markets of the late 1960s and 1970s. The 4% rule backtest lets you test any balance, withdrawal rate, mix and length.
A shorter or longer retirement
The length of retirement matters as much as the withdrawal. Someone retiring at 70 might plan for 20 to 25 years, while someone retiring at 55 could need 40. In the same historical test, a 5% withdrawal lasted 25 years in 81% of start years, and a 6% withdrawal lasted 20 years in 73%. Stretching a 4% withdrawal to 40 years lowered its success rate to 81%, from 93% over 30 years.
That is why later retirees can usually afford a higher withdrawal from the same $500,000, and early retirees should aim lower or plan on other income. It is also why many planners now use flexible spending rules, taking a little less after bad years and a little more after good ones, which historically lifts success rates a great deal without big sacrifices.
How to turn $500,000 into income
There are several ways to draw an income, and many retirees combine them. The simplest is a systematic withdrawal: sell a fixed amount from your portfolio each month or year, as the tables assume. Another is a bucket approach, keeping one to two years of spending in cash, the next several years in bonds and the rest in stocks, and refilling the cash bucket after good years.
A third option is to use part of the money to buy an income annuity, which pays a guaranteed amount for life in exchange for a lump sum. Annuities remove the risk of outliving your money, but you give up access to that capital and payouts are fixed when you buy, so they suit people who value certainty most. The pension lump sum vs annuity calculator compares a lump sum with a guaranteed income.
Common questions
How long will $500,000 last if I withdraw $2,000 a month? $24,000 a year is 4.8% of $500,000. At a steady 4% real return it lasts about 43 years, and in US market history a withdrawal near 5% lasted 30 years in about 70% of periods.
Can I retire at 60 with $500,000? Many people can, especially with Social Security from 62 or later and a withdrawal near 4%, which is $20,000 a year. Retiring earlier, or needing much more, makes it harder.
Is $500,000 enough to retire at 65? For many households it is, combined with Social Security. A 4% withdrawal plus an average benefit gives roughly $45,000 a year before tax for a single retiree.
What can shorten the timeline
Poor returns in the first years of retirement are the main danger, because withdrawals during a market fall lock in losses. Keeping a year or two of spending in cash, or cutting back for a year after a big drop, lowers that risk a lot. High fees also eat into the return directly, and taxes on traditional 401(k) or IRA withdrawals mean you may need to withdraw more than you spend.
Health care costs tend to rise faster than general inflation, and long-term care can be expensive late in life. If you have no other plan for those costs, leave some margin in your savings rather than drawing them to zero.
What can stretch it
On the other side, there are several ways to make $500,000 go further. Working a few extra years both adds savings and shortens retirement. Part-time income in your sixties lowers what you need to withdraw. Moving somewhere cheaper, including abroad, can cut living costs by a third or more: the retire abroad calculator compares 40 countries. And owning your home outright removes the biggest monthly bill.
Check your own numbers
Put your balance, yearly spending and expected return into the how long will my money last calculator to see your own timeline, or use the retirement savings check to compare your balance with common benchmarks for your age. These are estimates that assume steady returns, which real markets never deliver, so treat them as a guide rather than financial advice.
Run your own numbers
This guide is general information for planning, not personal financial advice. Figures were checked on the date shown and can change.