How Long Will $500,000 Last in Retirement?

The honest answer: anywhere from eleven years to indefinitely. That isn't a hedge — it's the math. The variable that determines which end of that range you hit is not your portfolio's return. It's how much you spend every month.

$500,000 is the most-searched retirement savings figure for a reason. It's what the median American household has when they stop working, or close to it. And it's a number that sits in a genuinely interesting zone: enough to matter enormously, but not so large that the spending question disappears. Getting that question right is what this post is actually about.

The baseline: what the 4% rule gives you

Start with the standard benchmark. A 4% annual withdrawal from $500,000 is $20,000 per year — about $1,667 per month. That's the figure most planners use as the "sustainable" starting draw for a 30-year retirement. Morningstar's 2026 retirement income research nudged that rate down to 3.9% for a 90% probability of success — a difference of just $42/month in practice, not worth agonizing over.

What that $1,667 number actually means: it is the most you can reliably take from the portfolio before income from anything else arrives. It was never designed to fund an entire retirement budget on its own. Social Security was.

What spending does to the timeline

Here is how long $500,000 lasts at different monthly spending levels, using a 5% real return (after inflation) and no other income source — the same assumptions behind the how long will $500k last calculator:

Monthly spending	Annual rate	Estimated duration
Under $2,083	Under 5.0%	Indefinite — portfolio grows
$2,500	6.0%	~36 years
$3,000	7.2%	~24 years
$4,000	9.6%	~15 years
$5,000	12.0%	~11 years

The breakeven worth memorizing: at 5% real return, the portfolio starts to shrink only once monthly spending exceeds $2,083. Spend less than that — a retiree with low fixed costs and no mortgage, for instance — and $500,000 never runs out under this smooth-return assumption.

The table moves dramatically once income from other sources enters the picture.

The Social Security multiplier

The average retired worker received $2,081 per month from Social Security in April 2026, according to SSA data. Consider a hypothetical retiree — call her Patricia, age 67, fictional — spending $3,500 per month total. Her Social Security benefit covers $2,081 of that. She only needs $1,419 per month from her portfolio: a 3.4% withdrawal rate. The portfolio grows.

Remove the Social Security income entirely and she needs the full $3,500 per month from savings — an 8.4% withdrawal rate. That depletes $500,000 in roughly 20 years.

Same spending, same portfolio, same investment returns. The only variable that changed was Social Security.

This is why the Social Security claiming decision is the highest-leverage choice for someone with $500,000 saved. Each year you delay claiming past 62 raises your monthly benefit by roughly 7–8%. Claiming at 70 instead of 62 increases the check by 77% — permanently, inflation-adjusted, for life. The breakeven on that delay is typically 12–14 years from the claiming date, meaning anyone who lives past their mid-seventies almost always comes out ahead by waiting. Model your personal numbers at the Social Security breakeven calculator.

The risk the table hides

The numbers above assume smooth, steady annual returns. They're useful for illustration, but they don't capture the most common way $500,000 retirements actually fail.

Research on sequence-of-returns risk consistently shows that negative returns in the first five years of retirement account for roughly 70% of retirement plan failures. The same average annual return, landing in a bad order, can break a portfolio that the averages suggested would be fine.

The mechanism is simple: a market drop of 30% in year two, while you're still withdrawing $3,000 per month to cover living expenses, means selling shares at 70 cents on the dollar. Those shares aren't available when the market recovers. A hypothetical couple — David and Maria, both 62, fictional — who retired in January 2008 with $500,000 watched the portfolio fall toward $315,000 before the year ended while their withdrawals continued at full pace. The 2008–2009 crash during the accumulation years hurt and then healed; the same crash in the first two years of withdrawal cut their runway by years.

The standard defense is low-cost and straightforward: hold 12–24 months of planned withdrawals in cash or short-term bonds when retirement starts. A cash buffer lets you draw living expenses during a down market without selling equities at depressed prices. It does not eliminate sequence risk, but it blunts the first-year damage that drives most plan failures.

The two decisions that actually move the needle

Investment alpha is hard to generate reliably. These two decisions are not:

Housing costs at retirement. Entering retirement without a mortgage payment is the functional equivalent of a significant raise — a $1,400/month payment eliminated at retirement has roughly the same practical effect as an additional $420,000 in savings at the 4% rule. That isn't always achievable, but for someone five or more years from retirement, directing extra capital toward paying off the mortgage rather than additional taxable investing often produces the better retirement outcome per dollar.

Social Security claiming age. Already the central argument above, but worth stating plainly: for a $500,000 retiree, delaying Social Security by one year commonly adds $5,000–$10,000 in additional annual lifetime income, depending on your earnings record. That is worth more than most reasonable improvement in portfolio return. It is also the most underused lever in retirement planning, because 62 feels free and later feels like a gamble — when the historical math usually runs the other direction.

Running your actual numbers

The table in this post uses clean assumptions: smooth 5% real returns, zero other income. Your real situation has a specific Social Security estimate, possibly a pension, a particular spending pattern, and a retirement age that determines how many years the money must last.

The how long will $500k last calculator lets you put those real numbers in — income from all sources, your own return assumption, your monthly budget — and see what the projected depletion year looks like. More instructive: move the Social Security field and watch how one number shifts the entire outcome. The calculator models the same math as the table above, but with your inputs instead of the generic ones.

Granary builds on this with the complete picture: taxes, ACA premiums before Medicare, required minimum distributions, Social Security timing trade-offs, and Monte Carlo uncertainty against your actual account balances. The $500,000 question always turns out to be a more specific question than it appears.

This post is educational content about retirement planning concepts, not personalized financial or tax advice.