How to Retire on $500,000

If you're wondering how to retire on a small nest egg, or how to simply make more income from a larger investment, consider these seven specialty high-yield investments.

A tiny pink piggy bank sits in the middle of a bird's nest that suggests an insufficient nest egg.
(Image credit: Getty Images)

If you ask most financial advisers how to retire on a half-million dollars, they’ll likely say it can’t be done.

Many financial advisers point to the “4% rule” (also the “Bengen rule”) for tax-advantaged accounts such as 401(k)s and IRAs. The 4% rule says you can draw up to 4% of your nest egg’s value in your first year of retirement, then add inflation to the prior year’s total and withdraw that each subsequent year, for 30 years, without worrying your money will run out. William Bengen, who first proposed the rule in 1994, later updated that figure to 4.5%.


Data is as of Sept. 22. Taxes are not factored into target calculations. Tax considerations will vary widely, with some investors paying no taxes, depending on several factors, including what type of retirement account you have (Roth IRA, traditional IRA, 401(k), etc.), the type of income you are collecting, your level of annual ordinary income, what state you live in and more. *Distributions made by closed-end funds are a combination of dividends, interest income, realized capital gains and return of capital.

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Michael Foster
Contributing Writer,
Michael Foster is the Lead Research Analyst for Contrarian Outlook, where he writes CEF Insider. He has written on high-income assets, dividends, closed-end funds and exchange-traded funds for a number of publications including Forbes, Bankrate and SeekingAlpha. Michael finished his PhD in 2008 and has been advising investors since 2011.