When to Retire: Planning Your Retirement Age

Deciding when to retire is one of the most significant financial and personal decisions most people ever make. For internationally mobile individuals, it carries additional dimensions: pension access rules that depend on jurisdiction and scheme type, healthcare considerations that may not kick in until State Pension age, and the question of which country to be in when the transition happens. This guide addresses how to assess financial and personal readiness, how to calculate your retirement number, and how to think about the timing of retirement in a way that maximises long-term financial security.

Financial Readiness vs Personal Readiness

Financial readiness and personal readiness are both necessary, but they are different things. It is possible to be financially ready to retire and psychologically unprepared for it — particularly for individuals who have spent decades in demanding careers and derive significant identity and structure from their work. It is also possible to feel ready to retire while carrying risks that make the financial position more fragile than it appears.

Financial readiness means having enough invested capital and future income entitlements to sustain your intended lifestyle for the rest of your life, with a prudent margin for uncertainty. It includes pension assets, investment portfolios, property equity, and state pension entitlements — offset by any remaining liabilities.

Personal readiness means having thought carefully about what you are retiring to, not just what you are retiring from. For internationally mobile individuals, this often involves significant decisions about where to live, how to maintain social connections across borders, and what purpose and structure will replace a career that may have spanned multiple countries.

Both need to be in place for a retirement to succeed. This guide focuses primarily on the financial dimension.

Calculating Your Retirement Number

The retirement number is the amount of invested capital you need to retire at your target standard of living. The most common approach uses the inverse of the sustainable withdrawal rate.

The 25x Rule

If you assume a 4% sustainable annual withdrawal rate — a figure derived from historical research on US market returns and widely used as a planning benchmark — then you need 25 times your annual expenditure in invested assets to retire.

Example: If your annual expenses in retirement are £80,000, you need £2,000,000 in invested assets.

For internationally mobile individuals, several adjustments to the base calculation are typically appropriate:

• Longer retirement horizon. Retiring at 55 rather than 65 extends the drawdown period by a decade. Over 35-40 years rather than 25-30, the 4% rate becomes more precarious. A 3% withdrawal rate (implying a 33x multiple) is more conservative and more appropriate for early retirees.
• Currency risk. If your assets are denominated in sterling but your spending currency is euros or Thai baht, exchange rate movements introduce uncertainty. A modest additional buffer — say, increasing the target multiple by 2-3x — compensates.
• Healthcare costs. If you are retiring before State Pension age and will not have access to an employer scheme or state healthcare in your country of residence, budget explicitly for private international health insurance and include it in your annual expenditure figure.

Including Non-Portfolio Income

The retirement number calculation should net off guaranteed future income that will reduce the draw on invested assets. If you expect a full new UK State Pension of approximately £12,550 per year (£241.30 per week in 2026/27), and that income does not require you to draw from your portfolio, you need £12,550 per year less from investments. At a 3.5% withdrawal rate, that reduces the required portfolio by approximately £359,000.

Similarly, rental income from a property you intend to retain, a defined benefit pension, or a part-time income in the early years of retirement all reduce the required portfolio size.

Break-Even Analysis: Working One More Year

A useful tool for borderline retirement decisions is break-even analysis: what is the financial benefit of working one additional year?

Working one more year achieves several things simultaneously:

• Additional pension contributions. A high earner contributing to a SIPP can add up to £60,000 (the 2026/27 annual allowance, or up to £240,000 if combining the current year with unused allowance carried forward from the three prior tax years, each of which had a £60,000 allowance) in a single year, subject to having sufficient relevant UK earnings.
• Additional portfolio growth. One more year of compounding on existing assets.
• One fewer year of drawdown. The portfolio has one fewer year of withdrawals to fund, directly reducing the capital required.
• State Pension entitlement. If you are below 35 qualifying National Insurance years, one more year of contributions may increase your State Pension.

The combined effect is typically substantial. For someone with a £1.5m portfolio who would otherwise draw £50,000 per year, working one more year and contributing an additional £50,000 to pension can extend the portfolio's longevity by three to five years depending on market conditions.

The break-even question is: at what age does your portfolio, if you retire today, produce the same lifetime income as working another year and then retiring? For many individuals in their late 50s, this break-even point is close — a single additional year of work can be worth more than several years of extra salary from a pure portfolio longevity perspective.

Early Retirement: Specific Considerations

Early retirement — before the State Pension age of 67 — creates specific planning requirements:

Longer drawdown period. Retiring at 57 with a reasonable life expectancy means potentially 35-40 years of retirement. This argues for a lower initial withdrawal rate (3% rather than 4%) and maintaining meaningful equity exposure throughout retirement.

Healthcare gap. Before State Pension age, and before age-related entitlements to local state health systems kick in, private international health insurance is essential. Premiums for someone aged 57 are materially lower than for someone aged 65; securing comprehensive cover early locks in a lower rate and ensures pre-existing conditions declared at application are covered.

Pension access. From April 2028, the minimum UK pension access age is 57. Retiring before that age means funding spending entirely from non-pension sources — ISAs, investment portfolios, property — until pension access opens. This requires those assets to be sufficiently large and liquid.

State Pension deferral. If you retire at 57 and the State Pension does not begin until 67, you have a ten-year gap to fund from your portfolio. Factor this into projections and consider whether deferring the State Pension beyond 67 (earning approximately 1% extra for each nine weeks deferred) is worthwhile once the income eventually begins.

The FIRE Movement and HNW International Investors

The FIRE (Financial Independence, Retire Early) movement advocates saving aggressively — often 50-70% of income — to achieve financial independence and retire decades earlier than conventional norms. The core principles — knowing your retirement number, living within your means, investing efficiently — are sound regardless of wealth level.

For high-net-worth internationally mobile individuals, FIRE's standard prescriptions require significant adaptation. The currency dimension, healthcare planning, estate structuring, and tax efficiency across jurisdictions are far more complex than the typical FIRE blog addresses. The mathematical foundation is nevertheless useful: achieving genuine financial independence requires roughly 25-33 times annual expenses in income-generating assets, and getting there faster is better than getting there later.

Phased Retirement

Phased retirement — gradually reducing work rather than stopping entirely — has several financial and personal advantages:

Extended portfolio horizon. Part-time income reduces the draw on investments, allowing them to continue growing. Even a modest consultancy income of £20,000-30,000 per year can make a meaningful difference to portfolio longevity over a 5-10 year transition period.

SIPP drawdown as a top-up. From age 57, a SIPP can be used to supplement reduced part-time earnings to maintain target spending levels, taking advantage of the personal allowance and basic rate band that might otherwise go unused in a phased retirement.

Reduced sequencing risk. If markets fall sharply in the first years after full retirement, phased retirees can absorb the blow more easily — reducing portfolio withdrawals and maintaining or increasing the part-time income component.

Identity and purpose. The psychological transition from full employment to full retirement is significant. A phased approach gives time to develop the non-work activities and structure that make retirement fulfilling.

For internationally mobile individuals, phased retirement often takes the form of consultancy, non-executive director roles, or advisory work in their professional field — activities that can continue from a retirement base in Cyprus, Spain, or elsewhere without requiring physical presence in a single country.

State Pension Age Planning

The UK State Pension age is currently 66, rising to 67 between 2026 and 2028. A further rise to 68 is under review. Your personal State Pension age depends on your date of birth.

Key planning points:

• Check your forecast. The government's Personal Tax Account at gov.uk provides both your NI record and a State Pension forecast. This is accessible from abroad and essential for retirement income planning.
• Fill NI gaps. If your record shows gaps, voluntary Class 3 NI contributions (approximately £957 per year as of 2026/27, at £18.40 per week, though verify the current rate) are often good value relative to the additional pension income generated over a retirement horizon.
• Deferral. Every nine weeks you defer beyond State Pension age, your eventual weekly pension increases by 1%. Deferral can be worthwhile for those who do not need the income immediately and want a higher guaranteed income for life from a later date.
• Frozen pension risk. If you retire to certain countries — including Australia, Canada, and New Zealand — the UK State Pension is frozen at the rate when you first claim, rather than being uprated annually. Check the current frozen pension country list before choosing a retirement destination.

Private Pension Access from Age 57

From 6 April 2028, the minimum age for accessing most UK personal pensions rises from 55 to 57. If you are considering retiring before 57, your financial plan must account for a period without pension access.

Pension assets that cannot yet be accessed are not available to fund spending. ISAs, general investment accounts, and other non-pension assets must be sufficient to bridge the gap. If you have previously made significant contributions to a SIPP expecting to access them at 55, this age change requires a review of your early retirement strategy.

Some individuals have a protected pension age under older scheme rules — a specific contractual right to access pension benefits before the new minimum age. If you believe this applies, take advice from a pension specialist who can review your individual scheme documentation.

How Global Investments Can Help

Deciding when to retire — and structuring the financial arrangements to make that date achievable — requires careful analysis that goes well beyond a simple calculation. Global Investments has been advising internationally mobile individuals on retirement timing and planning for over 32 years.

We help clients calculate their retirement number, stress-test their income projections against realistic scenarios, navigate the pension access rules across jurisdictions, and develop phased retirement strategies that align their financial and personal objectives. Whether you are targeting retirement in five years, ten years, or are already in the transition, we would be glad to discuss your plans.

Please contact us to arrange an initial conversation.

This guide is for educational purposes only and does not constitute personalised financial advice. Pension rules, tax legislation, and State Pension age provisions may change. Investment returns can fall as well as rise. Always take professional advice before making retirement decisions.