I Have $500,000. Can I Afford to Retire?
Key Points
The average retirement account balance among 55- to 64-year-olds in 2025 was $305,006.
Among those 65 and up, the average balance was $330,186.
Someone who has $500,000 has more than the average balance, but may still not have enough to retire.
- The $23,760 Social Security bonus most retirees completely overlook ›
Many Americans don't have a substantial amount of retirement savings. In fact, Vanguard's 2026 How America Saves report shows that the average account balance among 55- to 64-year-olds is $305,006, and the average balance among those 65 and over is $330,186. These are averages. Median balances are lower, at $107,269 for those 55 to 64, and $103,202 for those 65 and over.
If you have $500,000 invested for retirement, you have more than the median or average invested. But does that mean you are ready to retire? Is $500,000 enough, or will you find yourself struggling in your later years?
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Is $500,000 enough to live on in retirement?
There are a few key questions that will determine if a $500,000 nest egg is enough. The first is how much income this will produce for you.
The 4% rule is an easy rule of thumb to estimate that number. If you assume that you can take 4% out of your retirement account your first year in retirement, then adjust up for inflation, your $500,000 nest egg would give you $20,000 per year to live on.
The next question is your spending habits. How much do you actually need in retirement? That includes money you need not just for things like housing and travel, but also for out-of-pocket healthcare expenses and Medicare premiums. For most people, the income they need will be well above $20,000 per year.
That brings us to the third question of whether you have other income sources. If you have Social Security benefits and plan to claim them upon retirement, those benefits should replace about 40% of pre-retirement income.
Just be aware that if you claim before your full retirement age, your benefits will shrink -- so take that into account when deciding when and how your Social Security benefits will be available to add to your retirement income.
By identifying your income sources and comparing the total amount of income you'll have to your spending needs, you can determine if $500,000 is enough or if you need additional funds to retire.
What to do if you don't have enough?
So, what happens if you do the math and find out $500,000 isn't enough for you? Your best bet in this situation is to keep working and saving.
The longer you work, the more you can contribute to your 401(k) and other retirement plans, and the less time you will need to rely on your investments. A few extra years can also enable you to delay your Social Security claim, further shoring up your retirement and giving you the security you deserve.
The $23,760 Social Security bonus most retirees completely overlook
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