How long can you really stretch $500,000 if you’re also getting Social Security? It’s not a trick question - it’s the one everyone asks when they’re staring at their retirement number and wondering if it’s enough. The answer isn’t a single number. It depends on where you live, how you spend, when you start drawing benefits, and what surprises life throws your way. But let’s cut through the noise and give you a real, no-fluff breakdown based on today’s costs - especially if you’re living in a place like Auckland, New Zealand.

What $500,000 Actually Buys in Retirement

First, forget the idea that $500,000 is a magic number. It’s a starting point. If you withdraw 4% a year - the old rule of thumb - that’s $20,000 annually. But that doesn’t account for inflation, taxes, or healthcare. In 2026, with inflation still hovering around 3.2% in New Zealand, your $20,000 today will buy less in five years. And if you’re retired for 20, 25, or even 30 years? That $500,000 doesn’t look so big anymore.

Let’s say you’re 65 and you retire. You have $500,000 in savings. You plan to take out $25,000 a year to live on. That sounds reasonable. But here’s the catch: you’re not just living on that $25,000. You’re also getting Social Security. In New Zealand, the maximum age pension (New Zealand Superannuation) is $538 per week for a single person living alone. That’s $28,000 a year before tax. So if you combine your $25,000 from savings with $28,000 from Superannuation, you’re looking at $53,000 a year total. That’s more than most full-time workers in Auckland earn. But is it enough?

Living Costs in Auckland - The Real Numbers

Auckland isn’t cheap. Housing, groceries, transport, and healthcare add up fast. Let’s break down a realistic monthly budget for a single retiree in 2026:

• Housing (rent or mortgage): $1,800
• Utilities (electricity, water, internet): $350
• Food and groceries: $600
• Transport (public transit or car costs): $400
• Healthcare (medications, dental, glasses): $250
• Insurance (home, contents): $120
• Leisure, hobbies, dining out: $300
• Emergency fund top-up: $100

That’s $3,920 a month. Or $47,040 a year. So if you’re pulling $53,000 total from Social Security and savings, you’re just above the line. But what if your roof leaks? What if you need a new hip? What if inflation jumps to 4%? That $6,000 buffer disappears fast.

How Long Will $500,000 Last?

Let’s run the numbers. If you withdraw $25,000 a year from your $500,000 and earn 3% annual interest (a realistic return in today’s market), your money lasts about 27 years. That gets you to age 92. But if you withdraw $30,000 a year - maybe because you want to travel or help family - you’re down to 21 years. That’s age 86. And if you retire at 60 instead of 65? You’re stretching it over 30 years. That’s risky.

Now add inflation. If prices rise 3% each year, your $25,000 withdrawal in year one becomes $33,000 by year 10. That’s a 32% increase. Your $500,000 won’t stretch as far as the math suggests. Many retirees don’t realize this. They think their savings are safe because they’re earning interest. But inflation eats away at purchasing power silently - like a slow leak in a boat.

How Social Security Changes the Game

New Zealand Superannuation is a lifeline. It’s not just extra cash - it’s predictable, inflation-adjusted income. Unlike private pensions, it doesn’t vanish if markets crash. It doesn’t depend on your employer. It’s guaranteed by the government. That’s why it’s so powerful. Even if your $500,000 runs out at age 85, Superannuation keeps coming. That’s the difference between running out of money and running out of options.

But here’s the truth: Superannuation alone won’t cover everything. The $28,000 a year is meant to cover basics - food, shelter, utilities. It’s not meant for holidays, new cars, or helping grandchildren with university. That’s where your savings come in. If you’re spending more than $2,000 a month beyond your Superannuation, you’re burning through your $500,000 faster than you think.

What Can Go Wrong?

Retirement doesn’t always go as planned. People underestimate:

• Healthcare costs: A single hospital stay can cost $10,000 out-of-pocket if you don’t have private insurance. Dental work? $5,000 for a full set of implants. These aren’t emergencies - they’re inevitabilities.
• Family support: Helping a child with a mortgage or paying for a grandchild’s education? That’s common. But it drains savings fast.
• Market crashes: If you retire during a downturn and pull money from investments, you lock in losses. That’s why having cash reserves matters.
• Longevity: More people are living into their 90s. If you retire at 65, you could be retired for 30 years. Plan for it.

One study from the OECD found that 40% of retirees in high-income countries spend more than planned on healthcare in their last five years. That’s not a surprise - it’s a pattern.

How to Make 0,000 Last Longer

You don’t need to be rich to stretch your money. You just need to be smart.

1. Delay Social Security: If you can wait until 70 to claim, your weekly payment increases by 25%. That’s $35,000 a year instead of $28,000. That extra $7,000 means you can withdraw less from your savings.
2. Downsize your home: Selling a $1 million house and moving to a $400,000 apartment frees up $600,000. You can use that to boost your savings or pay off debt. In Auckland, many retirees do this.
3. Use your home equity: If you own your home outright, you can access equity without selling. A reverse mortgage (called a Home Equity Release in NZ) lets you get cash while staying put. But read the fine print - fees can be high.
4. Work part-time: Even 10 hours a week at $25/hour adds $13,000 a year. That’s like having a second pension.
5. Track every dollar: Use a free budgeting app. Know where your money goes. Most retirees spend more than they think on subscriptions, dining out, and impulse buys.

The Bottom Line

Can you retire on $500,000 plus Social Security? Yes - if you’re careful. If you live modestly, delay your pension, downsize your home, and avoid big unexpected costs, you can make it last 25 to 30 years. But if you’re spending $4,000 a month or helping family financially, you’re looking at 15 to 20 years - and that’s if you don’t get sick.

The real question isn’t how long the money lasts. It’s: What kind of life do you want to live? If you want to travel, eat out, and help your kids - you’ll need more. If you’re happy with quiet mornings, local parks, and home-cooked meals - $500,000 might be enough.

There’s no perfect answer. But there is a clear path: know your numbers, plan for surprises, and don’t assume your savings will last forever. Social Security keeps the lights on. Your savings? They’re the gravy.