$500 budget is not going to get you 120 fps @ 1080p in a lot of games, sorry to say.
If you really want to drive min fps that high, go for the Xeon upgrade and then save up for something beefier.
edit: you can try potato configs and the like, and that might actually work on the Westmere. It depends on what FPS games you're playing.
I play Dirty Bomb a lot. My 1800x running 1600x1200 stays near 170-180 fps all the time. No real slowdown unless someone does a mass suicide dogpile, which can bring fps down to maybe 100. In actual gameplay? Pshaw. Oh and that's with all the settings maxed out etc. Had I a more modern monitor running 1080p, I would at least be able to sustain 120 fps. Hell I could probably do 144.
Newer games? Well I would be GPU-bound with my aging 390 for starters. But turning down the settings, I would probably be okay.
So which games will you be playing anyway?