Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.<\/p>\n
How much money is enough?<\/p>\n
According to entrepreneur Kevin O\u2019Leary, it really depends on your lifestyle and how you invest your funds.<\/p>\n
\u201cDo not invest in your brother\u2019s restaurant,\u201d he warned in an interview clip posted to his official YouTube channel (1).<\/p>\n
\u201cOr a bowling alley, or a bar, or all that other crap. You\u2019ll lose your money,\u201d he added.<\/p>\n
Instead, O\u2019Leary believes a person could survive relatively comfortably with just $500,000 in the bank and \u201cdo nothing else to make money\u201d \u2014 provided that $500,000 is invested correctly.<\/p>\n
But is \u201cMr. Wonderful\u201d really onto something?<\/p>\n
Here\u2019s a closer look at his thesis and whether it\u2019s actually realistic for most people, particularly when thinking about their retirement.<\/p>\n
Half a million dollars doesn\u2019t seem like a lot of money these days. In fact, it\u2019s less than half the amount the average American says they need to retire: The latest Northwestern Mutual study found that U.S. adults believed the \u201cmagic number\u201d for retirement in 2025 is $1.26 million (2).<\/p>\n
Considering that alone, O\u2019Leary\u2019s number already sounds paltry.<\/p>\n
Nevertheless, he believes the right investment can deliver a reasonable retirement. A typical saver, he says, can generate 5% returns in fixed income securities with \u201cvery little risk,\u201d or between 8.5% and 9% \u201cif you put some of it in equities and are willing to ride the volatility (1).\u201d<\/p>\n
Those numbers certainly look realistic. The current yield on a 10-year U.S. Treasury bond is about 4.20% (3), while the S&P 500 has delivered average annual returns of around 10.56% since 1957 (4).<\/p>\n
But living off a 4.20% yield on half a million wouldn\u2019t be easy. It translates to just $22,500 in annual income, about 15% of which would go toward medical expenses alone by age 65, according to a study by RBC Wealth Management (5). This means that retirees following this strategy would need to rely on Social Security to make up the difference, or dramatically adjust their lifestyle.<\/p>\n
Even the upper end of O\u2019Leary\u2019s assumptions falls short. Assuming a person deploys $500,000 in a portfolio made up of stocks and bonds for 9% annual returns using the classic 60\/40 split, they would earn less than $50,000 a year.<\/p>\n
Simply put, O\u2019Leary\u2019s proposal isn\u2019t feasible for the vast majority of people.<\/p>\n
Read More: I\u2019m almost 50 years old and don\u2019t have retirement savings. Is it too late to catch up?<\/a><\/p>\n Read More: Non-millionaires can now invest in this $1B private real estate fund starting at just $10<\/a><\/p>\n If the goal is to be comfortable in retirement, another option is the \u201c4% rule\u201d guideline.<\/p>\n Created by financial advisor Bill Bengen, it\u2019s based on an analysis of historical returns and volatility of bonds and stocks. It says that retirees can safely withdraw 4% from their retirement funds every year over a period of 30 years. Every year after the first year, they would have to adjust the dollar amount to account for inflation.<\/p>\n In this way, it\u2019s assumed that over 30 years, retirees won\u2019t outlive their money if they spend according to the guideline (6). However, even this rule can fall short when you break it down.<\/p>\n Assuming a $1M retirement fund, an older American would only be able to withdraw $40,000 per year using this rule before adjusting for inflation. Meanwhile, the average retiree-led household spent $59,616 per year in 2024, according to the most recent Federal Reserve data (7).<\/p>\n Yet again, that means the average retiree needs to make up about $20K using Social Security. This doesn\u2019t leave much room for dealing with unexpected expenses, and assumes that much, if not all, of your debt \u2014 from mortgages to loans \u2014 will be cleared by retirement.<\/p>\n If you\u2019re worried about your retirement or looking to get ahead while you still can, here are some ways to potentially craft a more resilient portfolio.<\/p>\n One classic hedge against both a market collapse and inflation is gold.<\/p>\n Unlike fiat money, the precious yellow metal can\u2019t be printed at will by banks or the government.<\/p>\n As such, the theory goes, gold can store its value better during a downturn by virtue of its limited supply and historical value. This may be particularly appealing for those with active retirement portfolios who are worried about how a sudden downturn might affect their ability to draw 4% down.<\/p>\n Gold has also typically performed well during periods of economic or geopolitical stress. As of March, gold was up about 70% year-over-year, extending its streak as one of the best-performing assets of 2025 despite some pullbacks (8).<\/p>\n Now, you can take advantage of the long-term market potential of this precious metal by opening a gold IRA with the help of Priority Gold<\/a>.<\/p>\n Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, which combines the tax advantages of an IRA with the protective benefits of investing in gold<\/a>, making it an attractive option for those looking to potentially hedge their retirement funds against economic uncertainty.<\/p>\n To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver<\/a> on qualifying purchases.<\/p>\n Just keep in mind that gold is often best used as one part of an otherwise well-diversified portfolio.<\/p>\n Even if you don\u2019t follow his advice about living off of $500,000 in retirement, O\u2019Leary can still be worth listening to.<\/p>\n Among his many pieces of investing advice, he preaches a simple mantra for anyone chasing financial freedom: \u201cSave. Invest. Compound.\u201d<\/p>\n He believes if you do it for long enough, you\u2019ll be rich.<\/p>\n But that\u2019s easier said than done when nearly 1 in 4 American households live paycheck to paycheck (9). Sure, socking away for retirement matters, but so do the bills and purchases you can\u2019t avoid.<\/p>\n That\u2019s why finding a way to save while you spend can help you get a leg up, especially if coupled with an existing investment strategy.<\/p>\n With Acorns<\/a> \u2014 an automated investing and saving platform \u2014 you can make essential spending an opportunity for savings.<\/p>\n All you have to do is link your bank account to the app and spend as you normally would<\/a>. Acorns automatically rounds up the price to the nearest dollar and deposits the difference into a smart investment portfolio for you, allowing you to grow your wealth without even thinking about it.<\/p>\n With Acorns, you can invest in an index ETF with as little as $5 \u2014 and, if you sign up today and set up a recurring investment, Acorns will add a $20 bonus<\/a> to help you begin your investment journey.<\/p>\n But not everyone wants to set and forget their investments. For those who want to take the reins when it comes to investing, there are options available to help you make more informed picks.<\/p>\n For those willing to invest in individual stocks but who don\u2019t know where to start, platforms like Moby<\/a> can offer expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.<\/p>\n In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee so you can get a feel for if their investing advice is right for you.<\/p>\n Moby\u2019s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you<\/a>. Their research keeps you up-to-the-minute on market shifts, and can help you reduce the guesswork behind choosing stocks and ETFs.<\/p>\n Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes<\/a>.<\/p>\n If you\u2019re still feeling overwhelmed by all of the financial advice and want to take some of the burden off your own hands, it could be the right time to get in touch with a financial advisor.<\/p>\n With Vanguard<\/a>, you can connect with a personal advisor who can help assess how you\u2019re doing so far and make sure you\u2019ve got the right portfolio to meet your goals on time.<\/p>\n Vanguard\u2019s hybrid advisory system combines advice from professional advisors and automated portfolio management to make sure your investments are working to achieve your financial goals.<\/p>\n All you have to do is fill out a brief questionnaire about your financial goals, and Vanguard\u2019s advisors will help you set a tailored plan<\/a>, and stick to it.<\/p>\n Once you\u2019re set, you can sit back as Vanguard\u2019s advisors manage your portfolio. Because they\u2019re fiduciaries, they don\u2019t earn commissions, so you can trust that the advice you\u2019re getting is unbiased.<\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n @kevinoleary (1<\/a>); Northwestern Mutual (2<\/a>); CNBC (3<\/a>), (6<\/a>); Investopedia (4<\/a>); RBC Wealth Management (5<\/a>); The Federal Reserve (7<\/a>); The New York Times (8<\/a>); Bank of America Institute (9<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. 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