The Short Answer
Your retirement date depends on three things: how much you'll need to spend, how much income your pensions and investments will generate, and how long your money needs to last. The government says 67 (rising to 68) — but your number might be very different.
Step 1: Know What You'll Need
Most people need 50–70% of their working income in retirement. The Pensions and Lifetime Savings Association (PLSA) sets benchmarks:
Minimum
£14,400/year (single)
£22,400/year (couple)
Moderate
£31,300/year (single)
£43,100/year (couple)
Comfortable
£43,100/year (single)
£59,000/year (couple)
Step 2: Add Up What You've Got
- State Pension (check your forecast at gov.uk).
- Defined Benefit pensions (guaranteed income).
- Defined Contribution pensions (pot to draw from).
- ISAs and investments.
- Property equity (if downsizing).
- Other income (rental, part-time work).
Step 3: Bridge the Gap
If you want to retire before State Pension age, you need private income to bridge the gap.
Example: Retire at 58, State Pension at 67 = 9 years to fund from private sources. At £30,000/year, that's £270,000 needed just for the bridge.
Step 4: Stress-Test It
A single projection assumes everything goes to plan. But what if markets fall 30% in year one? What if inflation runs at 5% for a decade? What if you live to 100?
Monte Carlo simulations test thousands of scenarios and tell you the probability of your plan succeeding.
The Levers You Can Pull
- Increase pension contributions — even 1% more makes a difference over decades.
- Delay retirement by 1–2 years — double benefit: more saving, less spending.
- Downsize property.
- Work part-time in early retirement.
- Reduce planned spending.