Published November 1, 2026. Uses 2026 tax and Social Security figures. Educational information only — not financial advice.
"How long will $500,000 last?" is one of the most-searched retirement questions in the country, and the honest answer is a range, not a number: anywhere from 11 years to never.
That sounds useless until you see what drives the spread. It is not the return rate. It is three things you control — how much you withdraw, when Social Security starts, and how the first few years of the market go.
Here is the actual math, laid out so you can substitute your own numbers.
The Starting Point: Withdrawal Rate Sets the Clock
$500,000 does not have a duration. A withdrawal rate does.
| Withdrawal rate | Annual income from $500k | Simple exhaustion (0% real return) | ~Years at 6% nominal |
|---|---|---|---|
| 3% | $15,000 | 33 years | Never fully depleted in 30 yrs |
| 3.5% | $17,500 | 28.6 years | ~35+ years |
| 4% | $20,000 | 25 years | ~28–30 years |
| 5% | $25,000 | 20 years | ~21–23 years |
| 6% | $30,000 | 16.7 years | ~17–19 years |
| 8% | $40,000 | 12.5 years | ~13–14 years |
Two things jump out.
First, the 4% rule is a planning convention, not a guarantee. It came from the Trinity study's 30-year horizons using historical U.S. data. It is a reasonable starting point for a 30-year retirement and too aggressive for a 35-year one. At 3.5% you get more margin; at 5% you are taking real risk.
Second, small rate changes have outsized effects. Moving from 5% to 4% on $500,000 is $5,000 less per year — but it adds roughly seven years of portfolio life. That is the single most powerful lever most retirees have, and it is entirely within their control.
The Part Everyone Forgets: Social Security Changes Everything
$500,000 alone is a modest portfolio. $500,000 plus Social Security is a workable retirement for a lot of households, because the portfolio only has to cover the gap.
Take a household spending $55,000 a year:
| Scenario | Social Security | Portfolio must cover | Required rate on $500k | Feasible? |
|---|---|---|---|---|
| Claim at 62, single | $21,000/yr | $34,000 | 6.8% | No — too high |
| Claim at 67, single | $30,000/yr | $25,000 | 5.0% | Risky |
| Claim at 70, single | $37,200/yr | $17,800 | 3.6% | Yes |
| Couple, both at 67 | $50,000/yr | $5,000 | 1.0% | Comfortable |
| Couple, both at 62 | $35,000/yr | $20,000 | 4.0% | Tight but workable |
Look at the first three rows. Same $500,000. Same $55,000 spending. The difference between "this fails" and "this works" is the Social Security claiming age — not the portfolio.
That is the real lesson for a $500,000 retirement: your claim age is worth more than your asset allocation. Delaying from 62 to 70 raises the benefit roughly 77% (30% reduction to 24% credit), and it is inflation-adjusted and guaranteed for life. No bond ladder does that.
The lifetime trade-off is covered in Social Security at 62 vs 70: The Real Lifetime Cost.
Five Real Scenarios, Year by Year
Assume $500,000 at retirement, 6% nominal return, 2.8% inflation, and a 4% starting withdrawal that adjusts for inflation each year.
Scenario A: Single, claims at 62, spends $45,000
Portfolio covers about $24,000/year (Social Security $21,000).
- Starting withdrawal: $24,000 (4.8% of portfolio)
- Exhaustion: roughly age 82–84
- Verdict: tight. A bad first three years moves this to the late 70s.
Scenario B: Single, claims at 67, spends $45,000
Portfolio covers about $15,000/year.
- Starting withdrawal: $15,000 (3% of portfolio)
- Exhaustion: beyond 95 in the median case
- Verdict: workable, with meaningful margin.
Scenario C: Couple, both claim at 67, spends $62,000
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Check My Numbers →Social Security $50,000; portfolio covers $12,000.
- Starting withdrawal: $12,000 (2.4%)
- Exhaustion: not reached in a 30-year projection
- Verdict: comfortable. The portfolio is a supplement, not the engine.
Scenario D: Single, retires at 62, claims at 67, spends $45,000
The gap years are the problem, not the later years.
- Ages 62–66: portfolio covers the full $45,000 (9% withdrawal rate)
- Five years of that consumes roughly $225,000 of the $500,000
- From 67: $15,000/year on a much smaller balance
- Exhaustion: early-to-mid 80s
- Verdict: this is the scenario that most often fails. Bridging before Social Security is expensive.
Scenario E: Single, claims at 70, spends $45,000, has $150,000 outside the portfolio
Bridging from savings outside the $500,000 changes the math entirely.
- Portfolio untouched from 62 to 70
- At 70, Social Security is $37,200 and the portfolio has grown
- Starting withdrawal: $7,800 (about 1.3%)
- Exhaustion: not in a normal horizon
- Verdict: the strongest structure, if you can fund the bridge.
Notice that Scenario E is not about having more money. It is about having the right money — liquid, pre-tax-flexible dollars positioned to cover the years before guaranteed income starts.
The Risk That Breaks Every Table Above
Every projection so far assumes a smooth 6% return. Markets do not deliver that. They deliver sequences like +22%, −18%, +9%, −14%, +26%.
Sequence-of-returns risk is asymmetric: a bad first two years costs more than the same bad years later. Withdrawing $20,000 from a portfolio that just fell 25% locks in the loss permanently — you sold shares at the bottom and have fewer left for the recovery.
Run the same $500,000 through 1,000 orderings of the same average return and the outcomes spread widely:
- Best decile: the money outlives a 35-year horizon comfortably
- Median: lasts roughly as the smooth table predicts
- Worst decile: exhausted 6–9 years earlier than the table predicts
That spread is the reason a single-line projection is not a plan. It is the reason Monte Carlo exists. If you have not run yours, Free Monte Carlo Simulation for Retirement Planning walks through reading the output.
The two mitigations that actually work
- A cash and short-bond reserve covering 2–3 years of withdrawals. You spend from the reserve in down years instead of selling equities. This is the highest-value, lowest-cost structural fix available.
- Flexible spending. A plan that can cut 10% of discretionary spending in a bad year survives far more scenarios than a rigid one. Model it as a range, not a single number.
Taxes Are a Withdrawal, Too
A $20,000 withdrawal from a traditional 401(k) is not $20,000 of spending. At a 22% marginal rate it is about $15,600 after federal tax, before state tax.
That means the same portfolio supports less lifestyle than the withdrawal-rate table implies — unless the dollars come from a Roth or a taxable account with basis.
The practical ordering for most retirees:
- Required distributions first — RMDs are not optional. If you were born 1960 or later, your RMD age is 75.
- Fill the lower brackets from traditional accounts — take traditional withdrawals up to the top of the 12% or 22% bracket before touching Roth.
- Use Roth for spikes — a new roof, a car, a large medical year. Roth withdrawals do not raise MAGI, so they do not affect IRMAA or Social Security taxation.
- Harvest gains in taxable accounts in low-income years.
And watch the interaction: traditional withdrawals raise MAGI, which can make more of your Social Security taxable and can push you over a Medicare IRMAA threshold two years later. A $500,000 portfolio has less room for sloppy sequencing than a $2 million one.
So — How Long Will It Last?
| If your situation is… | Realistic horizon for $500,000 |
|---|---|
| Sole income, 5%+ withdrawal, retire at 62 | 15–20 years |
| Sole income, 4% withdrawal, retire at 65 | 25–30 years |
| Supplementing $25,000+ of Social Security, 4% withdrawal | 30+ years |
| Supplementing $50,000 of household Social Security, 3% withdrawal | Indefinitely, in most scenarios |
| Bridging a pre-62 retirement with no other income | 12–15 years |
The pattern is clear: $500,000 works as a supplement and struggles as a sole income. The variables that decide which one you get are withdrawal rate, claiming age, and the order of returns — all three of which you can model before you commit.
Check Your Own Numbers
Guessing at this is expensive in both directions — working longer than you needed to, or retiring two years too soon.
- Free: the retirement calculator and Savings by Age Guide show what your balance supports and how you compare. No account needed to start.
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Next Steps
- Pick your withdrawal rate deliberately — 3.5% for a 30+ year horizon, 4% for 25–30 years.
- Get your real Social Security numbers at SSA.gov for 62, 67, and 70.
- Compute the gap — spending minus guaranteed income. That is what $500,000 has to cover.
- Run the gap years separately if you retire before claiming.
- Stress-test a bad first two years, because that is the scenario that changes the answer.
⚠️ Educational information only. This article is not financial, tax, or investment advice. Projections are hypothetical, assume constant returns unless stated, and do not represent any actual investment. Consult a qualified professional about your situation.