You've saved $500,000. Maybe it took decades of steady contributions, or maybe you're looking at that number and wondering if it's enough to actually stop working. The short answer? It depends on a handful of factors that are entirely within your control. The longer answer involves some real math, a few honest trade-offs, and a plan you can actually stick with.
The 4% Rule: Your Starting Point
Financial planners have relied on the 4% rule for years, and it's still a useful baseline. The idea is simple: withdraw 4% of your savings in the first year of retirement, then adjust that amount for inflation each year after. With $500,000, that gives you $20,000 per year — roughly $1,667 a month.
On its own, $1,667 a month isn't going to cover much. But here's the thing — your savings probably aren't your only income source. Most retirees combine their nest egg with Social Security, and that changes the picture dramatically.
Add Social Security to the Equation
The average Social Security benefit in 2025 sits around $1,976 per month. If you're married and both collecting, that could be $3,000 to $4,000 combined. Stack that on top of your 4% withdrawal and you're looking at a very different situation:
- Single with average Social Security: $1,976 + $1,667 = roughly $3,643/month ($43,700/year)
- Married couple, both collecting: $3,500 + $1,667 = roughly $5,167/month ($62,000/year)
That $43,700 for a single retiree won't feel lavish in San Francisco, but it's perfectly workable in hundreds of mid-size cities and smaller towns across the country. Geography matters more than most people realize.
When $500K Works — and When It Doesn't
Half a million dollars can absolutely fund a comfortable retirement if a few things line up. You'll need Social Security or a pension to supplement your withdrawals. Your housing costs should be low — ideally you've paid off the mortgage. And you're not carrying high-interest debt into retirement.
It gets tight fast when those conditions aren't met. If you're still renting in an expensive market, dealing with ongoing medical costs, or supporting family members financially, $500,000 can evaporate quicker than you'd expect. A single year in assisted living can run $50,000 to $60,000, which would gut your savings.
Be honest with yourself about your spending. Track what you actually spend for two or three months before you make any decisions. Most people overestimate how much they'll cut back after they stop working.
How Long Will It Actually Last?
Using the 4% rule and assuming modest investment returns, $500,000 should sustain withdrawals for about 25 to 30 years. Retire at 65 and you're covered into your early 90s. But that assumes you don't panic-sell during a downturn or withdraw more than planned in the early years.
Sequence of returns risk is real. If the market drops 30% in your first two years of retirement, your portfolio takes a hit it may never fully recover from — even if markets bounce back later. Having one to two years of expenses in cash or bonds gives you a buffer so you're not selling stocks at the worst possible time.
Practical Ways to Stretch Your $500K
You don't have to accept the 4% rule as gospel. There are concrete moves that can make your money last longer:
- Delay Social Security to 70. Each year you wait past full retirement age adds about 8% to your monthly benefit. That's a guaranteed return you won't find anywhere else.
- Consider a part-time gig for the first few years. Even $1,000 a month from freelancing or consulting dramatically reduces how much you pull from savings early on.
- Relocate strategically. Moving from a high-cost state to one with no state income tax and lower housing costs can save you $10,000 to $20,000 a year.
- Use a flexible withdrawal strategy. Pull 3.5% in years when the market's down and 4.5% when it's up, rather than a fixed amount every year.
- Keep your portfolio working. Don't shift entirely to bonds. A 50/50 or 60/40 stock-to-bond allocation still makes sense for most retirees who need their money to last 25+ years.
Small adjustments compound over time. Cutting $300 a month in expenses adds up to $3,600 a year — that's money your portfolio keeps earning returns on instead of going out the door.
Run Your Own Numbers
Generic advice only goes so far. Your retirement math depends on your actual expenses, your health, your location, and what kind of life you want. The SSA's retirement estimator can show you what your Social Security benefit will look like at different claiming ages. That's a solid place to start building your real budget.
If you haven't already, take a hard look at what common retirement planning mistakes trip people up — and make sure you're not walking into any of them. And for more on building your financial cushion before you make the leap, our guide to retirement savings strategies covers the fundamentals.
Half a million dollars isn't what it was twenty years ago. But with Social Security in the mix, reasonable expectations about spending, and a willingness to stay flexible, it's enough for a lot of people to retire on. The key isn't having the perfect number — it's having a plan that adapts as your life does.