Probably, if you stay flexible. At a 4% withdrawal rate your money lasted to age 95 in 84% of simulations. To reach a 90% success rate, keep spending to about $18,000 a year ($1,500 a month, 3.6%).
We ran a $500,000 portfolio through 5,000 simulated retirements using shuffled S&P 500 returns from 1955 to 2024. Each row below shows how often the money lasted until age 95 at a given withdrawal rate. Spending rises with inflation every year.
| Withdrawal rate | Per year | Per month | With Social Security | Without |
|---|---|---|---|---|
| 3% | $15,000 | $1,250 | 98% | 58% |
| 3.5% | $17,500 | $1,458 | 94% | 31% |
| 4% | $20,000 | $1,667 | 84% | 14% |
| 4.5% | $22,500 | $1,875 | 61% | 4% |
| 5% | $25,000 | $2,083 | 33% | 1% |
| 6% | $30,000 | $2,500 | 3% | 0% |
How long does $500,000 need to last?
Retiring at 40 means your money needs to last about 55 years. That is longer than the 30-year window behind the classic 4% rule, which is why a lower withdrawal rate is usually needed for early retirees.
How much does Social Security help?
You would need to cover 27 years before Social Security starts at 67. With benefits of about $24,000 a year (in today's dollars), the 4% success rate is 84%; with no Social Security at all it drops to 14%, so benefits do a lot of the heavy lifting in this plan.
Sequence of returns risk
Average returns don't tell the whole story. Most failed simulations share a common factor: a market crash early in retirement, where withdrawals deplete a shrinking portfolio. This is known as sequence of returns risk, which explains why a portfolio with a "7% average return" can still be depleted prematurely.
A common defense against this risk is flexibility. Retirees who adjust their spending down after a bad year (often called a guardrails approach) can generally sustain a higher initial withdrawal rate than these fixed-spending models indicate.
Run it with your own numbers
Your situation isn't exactly this one. Open the calculator with this scenario loaded, then change your spending, Social Security or stock allocation and watch the success rate move.
Frequently asked questions
How much can I spend if I retire at 40 with $500,000?
About $18,000 a year ($1,500 a month) kept the portfolio alive to age 95 in at least 90% of 5,000 simulations based on S&P 500 returns from 1955 to 2024, assuming a 60/40 portfolio, 3% inflation, 15% tax on investment growth and Social Security of about $24,000 a year from age 67.
Is $500,000 enough to retire at 40?
At the classic 4% withdrawal rate ($20,000 a year), the money lasted to age 95 in 84% of simulations. Whether that is enough depends on your spending, so run your own numbers in the free calculator.
What if Social Security is cut?
With no Social Security at all, the 4% success rate for retiring at 40 with $500,000 is 14%, compared with 84% with benefits.
Assumptions
- Retire today at 40 and plan for money to last to age 95.
- 60% stocks (S&P 500 annual returns, 1955–2024, drawn at random without replacement) and 40% bonds/cash earning 4% a year.
- Spending and Social Security rise with 3% inflation each year.
- 15% tax on investment growth and Social Security in retirement.
- Social Security of about $24,000 a year in today's dollars, starting at 67.
These results are illustrative, not financial advice. Past market returns don't guarantee future results.