That receiver you currently have seems to be fine, with reasonable specs and connectivity, so spend the money where it counts, not on the electronics but rather the speakers. OTOH $500 may not get you very far with both sub and 5 speakers so you may want to upgrade in steps as you can afford, perhaps starting with a new set of speakers up front for L/C/R, using your old sub and two of the old speakers for surrounds.
"I realize that somebody playing free music isn't as commercial as a hamburger stand. But is it because you can eat a hamburger and hold it in your hand and you can't do that with music? Is it too free to control?" - Don Van Vliet (aka Captain Beefheart) discussing commercial success in the music biz