How long will $500k last in retirement?
$500k can last 30+ years at a sustainable 4% withdrawal ($20,000/yr) — but at a heavier 6% draw ($30,000/yr) it lasts only about 21 years. How long your money lasts comes down to how much you spend, taxes, and market luck.
How long $500k lasts at each spending level
Retiring at 60 with $500k invested (60% taxable / 30% traditional / 10% Roth), 6% nominal return, 3% inflation, no Social Security:
| Rate | Spend / yr | Spend / mo | How long it lasts |
|---|---|---|---|
| 3% | $15,000 | $1,250 | 30+ years (to 95) |
| 4% | $20,000 | $1,667 | 30+ years (to 95) |
| 5% | $25,000 | $2,083 | ~28 years (to 88) |
| 6% | $30,000 | $2,500 | ~21 years (to 81) |
| 7% | $35,000 | $2,917 | ~17 years (to 77) |
Three things that change the answer
- Taxes. A dollar in a traditional 401(k) isn't a dollar you can spend — withdrawals are taxed as ordinary income. This projection accounts for that, which is why real-world longevity is shorter than a naive "$500k ÷ annual spend."
- Sequence of returns. A market crash in your first few retirement years does far more damage than the same crash later — you're selling assets while they're down. Two retirees with identical average returns can get very different lifespans from the same $500k.
- Social Security, pensions, and part-time income. Every dollar of outside income is a dollar you don't withdraw. Adding Social Security alone often turns a "runs out" plan into one that lasts indefinitely.
These figures assume you retire at 60. Retire earlier and the same $500k must stretch over more years; retire later (or add Social Security) and it lasts longer. Model your exact situation in the calculator.
Why spending flexibility outweighs the starting balance
At a modest balance, the single most powerful lever is not which fund you pick but how willing you are to adjust spending as markets move. A rigid rule that raises withdrawals with inflation every year, regardless of what the portfolio actually did, is the most fragile approach. Trimming discretionary spending after a poor year and letting it recover after a good one can stretch a portfolio dramatically, because it avoids selling deeply into a downturn.
Social Security is the backbone that makes this work. It is inflation-protected income that lasts as long as you do, so the portfolio only has to bridge and supplement rather than carry the whole load. Delaying the higher earner's benefit raises that lifetime floor.
- Keep fixed, non-negotiable costs low so more of your spending can flex.
- Treat travel, gifts, and upgrades as adjustable rather than guaranteed.
- Hold a small cash reserve to avoid selling stocks in a down year.
The lower the fixed floor, the more room flexibility has to protect what remains.
Common questions
How long will $500k last in retirement?
At a sustainable 4% withdrawal ($20,000/year), $500k lasts 30+ years. At a 6% draw ($30,000/year) it lasts about 21 years. The exact answer depends on your spending, taxes, and market returns.
What's a safe withdrawal rate for $500k?
The classic "4% rule" — $20,000/year from $500k, rising with inflation — has historically lasted a 30-year retirement. Retiring early (a longer horizon) argues for a slightly lower rate closer to 3.5%.
Does this include taxes?
Yes. The projection applies the federal (and where relevant, state) tax you'd owe withdrawing from taxable, traditional, and Roth accounts, so the longevity figures are realistic rather than a simple division.