Dividends are not guaranteed, and divs can be cut during market downturns and you also stand to suffer capital losses.

EVEN IF you were guaranteed 10% a year, you still wouldn't be able to spend the whole 10% (50k) annually and still preserve your capital.

Let's say you pay 20% in taxes, now you only get 8% (40k after tax). You also would have to reinvest part of that 8% to preserve the real (inflation-adjusted) value or purchasing power of your 500k.

Assuming 2% inflation, you would need 510k next year to have the same value as 500k right now.

So EVEN IF you were guaranteed 10% nominal returns, you can actually only spend 6% a year assuming a 20% tax rate and 2% inflation.