Can you retire at 67 with $500k?

With $500k at age 67, you can safely spend about $25,000/year after tax ($2,083/month) without running out over a ~28-year retirement — about a 5.0% withdrawal rate, a touch above the classic 4% rule, which a shorter horizon like this can support. Whether that's enough comes down to your lifestyle; here's the full picture.

How long $500k lasts at different spending levels

The 4% rule is a starting point, not a guarantee — especially retiring at 67, when the money may need to last 28+ years. Here's what $500k supports, spending from age 67 to 95 at a 6% nominal return and 3% inflation:

Why the answer isn't just $500k × 4%

A back-of-envelope "$500k × 4% = $20,000" overstates what you can safely spend at 67, for two reasons this projection captures:

• Taxes. A dollar in a traditional 401(k) or IRA is taxed as ordinary income on the way out; taxable-brokerage gains are taxed too. Only Roth and cash are tax-free. So the safe spendable figure ($25,000) sits below the headline 4% draw.
• A long horizon. Retiring at 67 can mean 28+ years in retirement. The 4% rule was calibrated to about 30 years — stretch it further and a lower rate (nearer 5.0% here) is what actually survives a bad early market.

The portfolio, year by year

Spending the sustainable $25,000/yr from $500k at age 67, here's how the portfolio holds up in today's dollars (inflation-adjusted, so it reflects real spending power):

Assumptions: single filer, TX (no state income tax), 60% taxable / 30% traditional / 10% Roth split, 6% nominal return, 3% inflation, no Social Security. Add Social Security, a pension, part-time income, or a spouse in the calculator and the safe number rises — often substantially.

At full retirement age, the pot becomes a top-up

Sixty-seven is around full retirement age for today's retirees, and reaching it changes the character of the plan. Social Security pays its unreduced benefit and Medicare has been in place since sixty-five, so two of retirement's biggest line items — baseline income and health coverage — are largely handled before the portfolio is asked to do anything.

That turns a modest balance into a realistic top-up rather than the whole plan. The pot's job is to cover the gap between guaranteed income and actual spending, plus the occasional larger expense, and a shorter horizon means a given withdrawal rate stretches further than it would for someone retiring in their fifties.

The variable that carries the rest is spending flexibility. Retirees who can trim discretionary outlays in a weak market year, rather than drawing a fixed amount regardless of conditions, sharply reduce the odds of running short. At this age the plan rests on three legs — the benefit, the pot, and the willingness to adjust — and the third is the one most within your control.

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