How to Retire on $500,000
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%.
The median personal income in the U.S. is $33,706 per year, as of 2018 data. Not including Social Security, you'd need about $750,000 in your retirement account(s) to hit that number, if you followed this rule. Depending on where you live, as well as the lifestyle you want to maintain, you'd probably need to start with more. That's why many advisers point even higher, stating figures between $1 million to $1.5 million as ideal retirement targets.
Brent Weiss, head of planning at Facet Wealth in Baltimore, reminds us there is no one-size-fits-all retirement solution. "In retirement, we face a unique
