I feel two people on the pension with a freehold house and $500,000 in the bank is a fantastic retirement plan based on todays values of our dollar. The pension for two is approximately $500 per week which is ample to live off (only live off). Any holidays would come from the supplemental income the $500,000 would provide, which is approximately 1-2 decent holidays per year. The other question is do you have other dependants like children or pets? They cost lots lol.

I would invest half in Infratil for great dividends and growth and reasonable safety. Plus in $100,000 in the retirement sector. If I did not worry about the capital and focused on dividend, $100,000 in kingfisher(KFL) which gives a great dividend while hovering around $1.20-1.40 per share based over 5 years with 8.5% dividend. Leaving $50,000 in 6 month term deposits, or high on call accounts for access to money.