Can You Retire at 60 With $500,000?

Age 65 has traditionally been viewed as the standard retirement age, largely because it aligned with full Social Security benefit eligibility for many years. Today, however, full retirement age has shifted to 66 or 67, depending on your birth year. Despite this change, many individuals aim to retire earlier, often by age 60, to enjoy more freedom, travel and personal time while still in good health. Retiring at 60 offers a reasonable middle ground. It allows for an earlier exit from the workforce while still providing time to build a solid financial foundation. That said, many people reach this milestone with less savings than expected, making careful planning essential to ensuring a secure and fulfilling retirement.

A financial advisor can help you manage your investments as you plan for retirement.

Is $500k Enough to Retire at 60 On?

The amount of money you need to retire, regardless of age, is going to depend entirely on a number of factors that are unique to your individual situation. The answer as to whether $500,000 is “enough” for you to retire at 60 might be completely different than someone else looking to do something similar.

Generally speaking, you can retire at 60 with $500,000, but you may not like how much income you have or it may not be enough for your needs. However, some people can retire on less.

Here are three things to consider when determining if you have enough money to retire:

Desired lifestyle: The lifestyle you want in retirement will largely dictate whether this is enough money for you or not. Do you want to travel a lot? Do you plan on living in a foreign country? Answers to these questions will all provide different requirements for how much you need when you retire.
Living situation: Do you own a home that is paid off where you plan on living, or are you going to be renting throughout retirement? The costs associated with those two things can create quite different financial needs.
Your healthcare plan: At the age of 60, you won’t yet qualify for Medicare. So you’ll need to have a different plan to cover your healthcare costs, and they aren’t necessarily going to be cheap. If your health history isn’t as strong as others, then those costs can increase even more.

There are obviously more items you can consider, which could cause your retirement number to fluctuate. But these are the three of the largest expenses that are likely to affect everyone in varying degrees.

How Long Will $500k Last in Retirement?

The longevity of your retirement savings depends heavily on your lifestyle, spending habits and household size. If you’re sharing that $500,000 with a spouse, for example, your funds will need to stretch further, cutting the number of sustainable years significantly. Likewise, the amount you withdraw each year plays a crucial role in determining how long your savings will last.

According to the 4% rule, a common retirement planning guideline, you could safely withdraw $20,000 annually from a $500,000 portfolio. Under this strategy, your money is expected to last at least 30 years, assuming it remains invested and earns moderate returns. However, this level of income may be tight for most retirees. According to the most recent data, the Bureau of Labor Statistics reported that the average retiree spent almost $54,000 in retirement. This means living on $20,000 per year would likely require a highly frugal lifestyle with limited discretionary spending.

Your investment strategy during retirement also has a major impact on how long your savings last. If you keep the entire $500,000 in cash or low-interest accounts and draw from it without earning returns, the funds could run dry in 10 to 12 years, especially in higher-cost areas. However, by keeping a portion of your savings invested in a balanced portfolio, such as a mix of dividend-paying stocks and bonds, you can extend the life of your money significantly. Strategic withdrawals, careful budgeting and continued investment growth can help make $500,000 last longer than many expect.

Where You Could Invest Your Money for Longevity

A woman researches "Can I retire at 60 with 500k?"

If you’re wanting to stretch your retirement dollars, then you’ll likely want to think about how you can earn more income from your funds or what types of investments have the highest returns over time. This is where becoming a more educated DIY investor or working with a financial advisor could be extremely helpful.

Some examples of investments that might help you with this are stocks, bonds, real estate investment trusts (REITs) or annuities. Bonds are the most stable, but also provide the lowest potential return when compared to similar investments. Both stocks and REITs provide long-term stability, but can fluctuate in the short term, which might really hurt you once you’re in retirement. Both can provide nice returns over the course of retirement, however. Some stocks can also pay dividends which could help you earn additional income from your investments.

Sample Asset Allocation for a $500,000 Portfolio at Age 60

At age 60, your investment strategy should balance growth with capital preservation, especially if you’re approaching retirement or planning to retire soon. A $500,000 portfolio can be structured to generate income while still allowing for moderate growth over time. Here’s what a sample asset allocation might look like for a 60-year-old retiree with a moderate risk tolerance:

50% Stocks ($250,000). Focus on a mix of dividend-paying stocks, U.S. large-cap companies, and possibly some exposure to international equities. This portion helps your portfolio grow and hedge against inflation.
35% Bonds ($175,000). Invest in a blend of government and high-quality corporate bonds or bond funds. Bonds provide steady income and help reduce overall portfolio volatility.
10% Alternatives ($50,000). Consider assets like real estate investment trusts (REITs) or inflation-protected securities (TIPS) to add diversification and protect against inflation.
5% Cash or Cash Equivalents ($25,000). Keep some funds in high-yield savings or money market accounts for emergencies or near-term expenses.

This mix allows you to continue growing your nest egg while generating income and maintaining liquidity. Over time, you may gradually shift more assets toward bonds and cash as you move further into retirement and seek additional stability. Regularly rebalancing and reviewing your investment strategy, especially in response to changing market conditions or personal needs, can help ensure your $500,000 continues to work for you well into retirement.

Investing in an Annuity

A potential investment if you’re looking for a guaranteed income with your $500,000 during retirement could be an annuity. Annuities are essentially contracts you sign with an insurance company where you pay a premium in exchange for guaranteed payments at a later date. You can also use an immediate annuity that starts right away, but likely will provide less return than a longer term contract.

There are multiple types of annuities, such as fixed or variable annuities. The fixed annuity guarantees the return of the principal that you paid in along with a small amount of interest. Your payments do not change throughout the life of your contract. With a variable annuity, your principal is still guaranteed, but the returns you receive are not. These carry a higher threshold of risk, but can provide more return during retirement.

You can also get a lifetime income rider that guarantees you income throughout your entire life and not just for a specific period of time. This will cost more on the monthly premium, however. This might be the best way to stretch your $500,000 if you find that an annuity works for you.

There are many pros and cons to annuities, such as how they are taxed and when you can withdraw the principal. But ultimately it can be worth considering if you have less income than you would like when you retire. Buying an annuity can help many people retire at 60 with only $500,000 without having to sacrifice their normal lifestyle.

Other Factors to Consider When Saving for Retirement

There are so many things to consider if you’re thinking about retiring early that go beyond where your income will come from. Once you retire you’ll likely be on the hook for a number of things that you weren’t before, such as the full cost of your health insurance. Here is a list of four things that can change how much money you need to retire, which you should consider before taking the plunge:

Inflation: The cost of retiring at 60 in 10 years will be more than the cost of retiring at 60 today. It’s important to make sure you take that into account when running your own numbers.
Where you plan to retire: Retiring in New York City is going to be much different than retiring in North Dakota. Costs are going to vary widely so the cost of living where you plan to be will have a huge impact in how much money you need.
Insurance: You’ll need to pay for health insurance since you won’t yet qualify for Medicare, as discussed previously. You need a plan for where this insurance is going to come from and how much it’s going to be.
Part-time work: Many people work part-time during retirement, especially if they retire early. It not only provides you with some extra income, lowering how far your $500,000 has to go, but it can also give you a nice purpose during the week.

Bottom Line

A couple deciding to retire at 60 with $500,000.

Overall, retiring at 60 is doable with $500,000 but it may not be doable for you. It really depends on your personal living situation and what your potential expenses are going to be. When you’re able to calculate that, you’ll know how you should invest your funds to make sure you have enough income during retirement to live a sustainable life that you can personally enjoy.

Tips for Saving for Retirement

Working to earn the money for retirement is time-consuming enough that simultaneously managing your retirement plans could be tough. Consider using a financial advisor who can help you create a retirement plan. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
You can also use SmartAsset’s retirement calculator to help you estimate how much you may need to save in order to live the retirement life you’re looking for.