Pension & retirement
Mervyn Casserly
For most of our working lives, we are encouraged to save, invest and build financial security for the future.
Then retirement arrives, and the focus changes completely.
After years of building wealth, the challenge is no longer just accumulating money. It is knowing how to use it well.
I see this often. Clients spend decades carefully building pensions, ISAs and investments, only to find that drawing on those savings feels uncomfortable.
It can feel far easier to preserve wealth than to spend it, even when the money is there to support the lifestyle they have worked hard for.
That is the idea behind the “Die With Zero” philosophy, popularised by author Bill Perkins.
In simple terms, the argument is that money should be used to create experiences, memories and impact during your lifetime, rather than being left untouched until it is too late to benefit from it.
I think there is a lot of value in that message.
But, as with most areas of financial planning, the right answer is rarely at either extreme.
Money is not the end goal. It is a tool that should help you live the life you want, look after the people you care about and make choices with confidence.
For some retirees, that might mean travelling more while they are still fit and active.
For others, it might mean helping children onto the property ladder, supporting grandchildren with education, or simply saying “yes” to the experiences they have delayed for years.
There is also a practical point here. The early years of retirement are often when people are healthiest, most active and best able to enjoy their money.
Waiting too long can mean missing opportunities that cannot always be recreated later.
That does not mean spending recklessly.
It means recognising that there can be a cost to being too cautious as well as a cost to spending too much.
The difficulty is that deliberately aiming to run your wealth down too aggressively carries real risks.
The biggest unknown is longevity: none of us knows how long we are going to live.
A retirement lasting 30 years or more is now a realistic possibility for many people.
That creates a genuine risk of spending too much too soon and having fewer options later in life.
Care costs are another important unknown.
The UK does benefit from the NHS and some social care support, but later-life care, property adaptations and additional support can still create significant costs.
Investment markets also need to be factored in. Retirement plans are built using assumptions about growth, inflation and withdrawals, but markets do not move in straight lines.
A difficult period early in retirement can have a lasting impact on how sustainable withdrawals are.
This is known as ‘sequence of returns risk’, where poor investment returns early in retirement will cause a portfolio to run out of money much faster. That is why many people still want a sensible financial cushion.
It is not about hoarding money for the sake of it. It is about keeping enough flexibility to deal with the unknowns.
In my view, good retirement planning is not about choosing between spending everything and preserving everything.
It is about deciding what level of spending, security and legacy feels right for you.
Most retirement plans need to balance three things:
For some people, the right answer is to spend more in the earlier years of retirement, when they are more likely to enjoy it.
For others, leaving an inheritance is a core part of their values and financial planning.
Neither approach is automatically right or wrong.
The important thing is that the decisions are intentional, affordable and linked to what actually matters to you.
This is where estate planning becomes part of the same conversation.
Spending, gifting and leaving money behind are not separate decisions.
They all sit within the wider question of how your wealth should support you and the people who matter to you.
Effective estate planning is about making sure assets pass to the right people, at the right time, in a tax-efficient way that remains consistent with your wishes.
That might include:
For many families, having these conversations earlier can be extremely valuable. A gift made at the right time can have a far greater impact than a larger inheritance received much later.
However, you need to do this carefully.
You should not compromise your own financial security to make gifts or reduce a potential inheritance tax bill.
This is where proper financial planning adds real value.
A good plan does not just show what you have today. It helps you understand what your money may allow you to do over the rest of your life.
Through cashflow modelling, you can test different scenarios before making big decisions.
For example:
Can you afford to retire earlier?
Could you gift money to your children now without putting your own future at risk?
Can you take the holiday you have always talked about?
What happens if markets fall, inflation is higher than expected, or care costs arise later in life?
These are not questions that can be answered properly by looking at a pension balance or investment statement in isolation.
They need context. They need assumptions. And they need a plan that can be reviewed as life changes.
That, for me, is the real point of financial planning.
It is not about encouraging people to spend everything. It is about helping them make informed decisions with confidence.
Not necessarily.
The better aim is to avoid reaching later life with unnecessary regret: regret that you spent too much too soon, or regret that you were so cautious you never enjoyed what you had built.
The goal should be to live with confidence, enjoy the wealth you have worked hard to build, support the people who matter to you where appropriate, and keep enough flexibility for whatever life brings next.
A financial adviser can help you to navigate your way through the different pitfalls of spending too little or too much and help you plan your financial future with confidence – whichever way you see it.
An adviser can:
Get in touch with an adviser today to start your plan – or check on its progress so far.
Disclaimer: This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax treatment depends on individual circumstances and may change. The value of investments can go down as well as up and you may not get back the full amount you invested. Past performance is also not a reliable indicator of future performance. Always seek professional advice before making financial decisions.
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The “Die With Zero” philosophy argues that people should aim to use their wealth during their lifetime to maximise experiences, fulfilment and impact, rather than accumulating substantially more wealth than they need and leaving it unused.
It can be a useful way of thinking about retirement spending, but deliberately trying to reduce your wealth to zero carries risks. Longevity, investment returns, inflation, care costs and unexpected expenses can all affect how much money you need later in life.
Not necessarily. A more realistic goal may be to spend and enjoy your wealth while maintaining enough financial security to support you throughout retirement and deal with unexpected costs.
There is no universal amount that everyone should spend. The appropriate level depends on your income, pension and other assets, lifestyle, health, housing costs, expected longevity and whether you want to leave an inheritance.
The main risks include living longer than expected, experiencing poor investment returns, higher-than-expected inflation, unexpected expenditure and later-life care costs. Spending too aggressively early in retirement can leave you with fewer financial options later.
Giving money during your lifetime can allow family members to benefit from it when they may need it most. However, gifts should be considered alongside your own financial security, tax implications and wider estate-planning objectives.
Cashflow modelling is a financial planning tool that projects your income, expenditure, assets and liabilities over time. It can be used to test different retirement and spending scenarios and assess how sustainable a financial plan may be.
Yes. Cashflow modelling can help illustrate how different levels of spending, investment returns, inflation and unexpected costs could affect your finances over time. It can therefore provide useful context when deciding whether you can afford to spend or gift more.
That depends on your personal priorities. Some people place a high value on leaving money to their family, while others prefer to use more of their wealth during their lifetime. Financial planning can help you balance both objectives.
A combination of appropriate retirement income planning, sensible investment management, realistic spending assumptions and regular reviews can help. Cashflow modelling can also be used to test how your finances might cope with different scenarios.
For further information, please contact:
Pension & retirement
Pension & retirement
Pension & retirement
Pension & retirement
Pension & retirement
Pension & retirement
For further information, please contact: