When can I retire? What to consider, how to plan, and a tool to help you get started...

Deciding when you can retire is about more than just reaching a milestone birthday, especially for high net worth individuals (HNWIs). It involves assessing a combination of financial, personal and lifestyle factors to ensure you can support yourself comfortably for the rest of your life. Everyone is different and there isn’t a one-size-fits-all answer. Some things to consider include:

• Pension savings and investments: One of the biggest factors is how much you’ve built up in your pension pots, savings, and other investments. You can usually start accessing defined contribution pensions from age 55 (rising to 57 from 2028), although doing so earlier means your funds need to last longer.[2]
• State Pension eligibility: The State Pension provides a base level of income once you reach the qualifying age, which is gradually rising. While it’s a valuable part of your retirement income, it’s unlikely to be enough on its own, so it should be viewed as just one part of a broader retirement plan.
• Living costs and lifestyle: Think carefully about how much you’ll need to maintain your preferred lifestyle. This includes daily essentials, housing, and discretionary spending such as travel, hobbies or dining out. While the Pensions and lifetime savings association (PLSA) defines a ‘comfortable’ retirement for an individual as £43,100 for many this may not be enough.[3]
• Health and life expectancy: According to the Office for National Statistics (ONS), the average life expectancy for a 45 year old man is 84, and for a woman, it’s 87. However, there’s still a 1 in 4 chance that a 45 year old man will live to 93 and a woman to 96.[4] This makes it essential to plan for a retirement that could last potentially three decades or more.
• Debt and financial commitments: Entering retirement with minimal or no debt gives you more control over your finances. Ongoing obligations like a mortgage or personal loans can limit your flexibility.

When should you start planning for retirement?

The simple answer is as early as possible. The sooner you start planning for retirement, the more time you have to build your savings and investments, make informed decisions, and adjust your strategy as life evolves.

That said, it’s never too late to start. Whether you’re in your 20s or 50s, understanding where you stand today is the first step toward a secure retirement. A good retirement plan takes into account your income, expected expenses, pension savings, and personal goals.

How to start planning for retirement

The Saltus retirement calculator can be a great first step to help you start planning your retirement. By entering some basic information (such as your age, planned retirement age, current pension pot size, annual contributions and your desired annual income at retirement), you’ll receive a projection indicating whether you’re on track to meet your goals.

In addition to this personalised projection, the calculator also provides insight drawn from our Wealth Index, based on twice-yearly surveys of over 2,000 individuals with £250,000 or more in investable assets.[5] This provides insight into how your retirement plans compare to those of people in a similar age group and financial position, including average pension pot sizes and contribution levels.

Of course, calculators have limits. They are simply a starting point to understand how your current financial position aligns with your retirement goals. To build a more complete and personalised picture, many people choose to work with a financial adviser. Advisers can take the initial projections from the calculator and develop detailed cash flow models that map out your income, expenses, assets, and liabilities over time.

These models allow for scenario testing such as retiring earlier, changing spending habits, or providing financial support to family members. It’s important to remember, though, that these projections are based on assumptions about factors like inflation, market performance, and lifestyle choices. They’re not guarantees, but they provide a practical, flexible framework to support better long term decisions.

Below is an example of what a simple cash flow plan might look like (you can also read more about them here: Cash flow planning: a guide for UK investors | Saltus):

Case study: Alex, age 45

At 45, Alex is thinking seriously about retiring at 55. He earns £300,000 a year (gross) and wants the freedom to enjoy travel, time with family, and personal interests. His target is a gross annual retirement income of £70,000, which is enough to maintain his lifestyle without compromise.

Alex has already built a pension pot of £300,000. Until recently, he had been contributing £60,000 annually. However, due to the tapering of the Annual Allowance -triggered by his adjusted income exceeding £260,000 – his annual limit has now reduced to £40,000.

Assuming an annual investment return of 5.5% (balanced risk level) and excluding inflation, the calculator projects his pension could grow to approximately £924,318 by age 55. However, it also shows that this would likely be depleted by age 73, leaving a projected income shortfall of around £27,106 per year.

Compared to his peers, the calculator also shows that Alex is contributing more than most individuals in his age group and financial position, yet his pension pot still falls slightly below the average for 45-54 year olds. Realising that relying solely on his pension may not be sufficient, or the most tax-efficient approach, Alex seeks professional guidance.

Working with a financial adviser, Alex develops a long term cash flow plan. This plan takes into account broader goals, including funding his children’s education and preparing for potential care needs later in life. With his pension contributions now limited by the taper, his adviser helps him deploy surplus income across a diversified mix of tax-efficient investment vehicles:

• ISAs for tax-free growth and withdrawals
• Venture Capital Trusts (VCTs) to benefit from upfront income tax relief and potential capital gains
• Offshore bonds for long term growth with deferral of income tax
• General investment accounts making use of capital gains tax allowances
• Pension contributions for his spouse, expanding their household retirement savings potential

They also run scenarios to test how market downturns, inflation, or property decisions like downsizing could impact his long term position.

By combining the early insight from the retirement calculator with a tailored cash flow plan, Alex has a clearer roadmap toward early retirement.

Case study: Maria, age 60

Maria is 60 and planning to retire at 66, when she will become eligible for the State Pension. A recent milestone birthday, and a gradual transition into semi-retirement, prompted her to take a closer look at her financial position and start planning with more intention.

Currently earning £70,000 annually as a part-time consultant, Maria contributes £10,000 per year to her pension. Over time, she has built up a pension pot of £1.2 million and holds additional assets, including her main residence, a holiday home, and a range of investments.

Using the Saltus retirement calculator, Maria models her goal of drawing gross £50,000 annually. Assuming a 5.5% annual investment return (balanced risk level) and excluding inflation, the calculator shows that Maria is well on track to meet her goal. In fact, it projects an annual income surplus of around £32,763.

When compared to her peers, the calculator shows Maria that while her pension contributions are slightly below average for people in her age group and financial position, her overall pension savings are significantly above average. This leads her to think about whether her current pension approach is in line with her other financial goals. With some concerns about balancing her pension, other investments, and managing her estate, Maria decides to get some professional financial advice.

Following a meeting with her financial adviser, Maria begins planning more deliberately for her future care needs. They model different care cost scenarios and agree to ring-fence a portion of her projected income surplus specifically for this purpose, giving her greater peace of mind.

With care planning addressed, Maria and her adviser turn their attention to legacy and tax efficiency. Given the size of her estate, including property and investments, Maria is facing a potential inheritance tax (IHT) liability. To help offset this, they put in place a life insurance policy, funded from her excess monthly income, to cover part of the anticipated IHT bill.

Finally, with the remaining balance of her projected surplus, Maria builds a structured gifting strategy to support her children during her lifetime, which gradually reduces the value of her taxable estate.

By combining financial forecasting tools with expert advice, Maria has created a retirement strategy that not only meets her income needs but also supports her wider goals around care, family, and tax planning. As always, it’s important to remember that this represents one possible approach. There are a range of other options that could also be considered depending on an individual’s evolving circumstances and preferences.

Next steps

Planning your retirement isn’t just about age, it’s about readiness. Whether you’re aiming for early retirement or planning for a more traditional timeline, understanding your financial position and goals is key. Use tools like a retirement calculator to gain early insights and consider working with a financial adviser to build a comprehensive, adaptable plan. The earlier you start, the more control you have and the more confident you can be in retiring on your terms.