Wealth of Advice, Swale House, Mandale Business Park, Durham, DH1 1TH
In this episode of the Retire Well podcast, advisers Matthew and Joe explore the common mistakes people make when planning retirement at age 55. From psychological readiness to pension access rules, tax efficiency, and investment risk, the conversation offers practical insights for anyone approaching early retirement.
Retirement isn’t just about having enough money—it’s also about being mentally prepared. An adviser can help you with tax-efficiency and work towards financial readiness, but this needs to go hand in hand with mentally preparing.
Without a clear plan for how to spend time in retirement, even financially secure individuals may hesitate to take the leap.
From 2028, the minimum pension age will rise to 57 for those born after 6 April 1973. Protected pension ages may apply, but consolidation could unintentionally remove that protection.
Many retirees assume their spending will drop, but early retirement often includes travel and hobbies that increase costs. Joe notes:
“Just because you’ve flipped into retirement doesn’t mean that you’re immediately going to stop spending”
In reality, a lot of people actually see a slight increase in spend in the early part of their retirement as they start to spend on all the things they have been wanting to do but haven't had the time to do during their working life.
Withdrawing large sums of tax-free cash without a clear purpose can reduce flexibility later. Strategic use of ISAs, pensions, and general investment accounts can help manage tax more efficiently.
Retirees often fear market volatility, but avoiding risk entirely can expose them to inflation and longevity risk. Conversely, high withdrawal rates can deplete pensions too quickly.
Using multiple tax wrappers and coordinating with a spouse’s allowances can significantly improve tax efficiency. Drawing income strategically from ISAs, pensions, and other sources helps preserve capital.
Many plan to reduce pension withdrawals when state pension kicks in—but fail to follow through, risking long-term sustainability.
Retiring at 55 is possible, but it requires thoughtful planning across financial, emotional, and lifestyle areas. Key takeaways include:
Whether you’re ready to retire now or just starting to plan, this episode reminds us that retirement is not just a financial milestone - it’s a life transition that deserves careful consideration.
If you want a better view of what your future could be, we'll have a chat and work out if we make a good fit for you and your financial picture.
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