Quick answer: yes, many people retire on $500,000 — usually because Social Security does the heavy lifting. At a sustainable 3.5% withdrawal rate, $500k produces about $17,500 per year; add typical Social Security and a couple can reach $55,000–$70,000 of annual income.
It works when spending is modest, the house is paid off, and claiming is delayed. It fails when withdrawals creep above 5% or retirement starts before Medicare at 65.