How Much Do I Need to Retire at 50?
- Chris Young
- Jul 21
- 6 min read
The idea of retiring at 50 for many of us, would be a welcome goal. To travel the world while we are young and healthy enough, play a bit more golf and get that handicap down to single figures, or just spending more time with family and friends could be the dream.
Your mortgage may be close to, or completely paid off, the children may have flown the nest, or are about to, and you have built up healthy savings and pensions reserves.
Despite all your hard work, some niggling questions remain;
How much money do you need to retire at 50?
How much should you save for retirement?
What is a good pension for 50?
How much income will I need to retire at 50?
The aim of this article is to help you answer some of those questions and provide some general advice on how to retire early in the UK.
1. How much money do you need to retire at 50?
A common rule of thumb is the “25x rule”: multiply your expected annual spending by 25 to estimate how much you need to retire.
For Example:
If you plan to spend £45,000/year, you’ll need:
£1,125,000 to retire (25 x £45,000)
Or closer to £1.2m to allow for inflation, tax, and market dips
But what if you have other income sources—rental property, part-time work, dividends?
If £10,000 of that £45,000 is covered, you'd only need:
£35,000 x 25 = £875,000 – a much more achievable number for many in your position.
If you would like help with your specific circumstances, then book a FREE consultation with our retirement planning specialists and see how far away you might be from retiring early.
2. How much will YOU actually spend?
Spending doesn’t stop in retirement—it just changes. At 50, retirement often means more travel, leisure, and hobbies—not less.
The Pensions and Lifetime Savings Association (PLSA) suggests you will spend around:
£43,100/year for a “moderate” lifestyle (couple)
£59,000/year for a “comfortable” lifestyle
If you're single, those figures are closer to £31,000 and £43,000. The full table is detailed below.
Use this table as a guide only -this is because your own specific circumstances will determine what you will need. Our Annual Expenditure Document can help you with your own numbers.
3. What Will Fund Your Lifestyle?
If you're retiring at 50, there's a 17/18 year gap before you can draw your State Pension (currently age 67–68). So where will the income come from?
This will likely from a mixture of Income, supplemented by Capital reserves.
Income:
Interest from savings
Dividends from shares or a business
Rental income from property
Defined Benefit Pension income
Part Time Work
Capital:
Investments
Defined Contribution Pension Pots
Cash savings
A good retirement plan is all about managing these pots wisely—balancing continued investment growth, tax efficiency, and risks.
Income Strategy – How to Create a Retirement Income Plan?
Creating a retirement plan will be a matter of combining your income and capital pots to meet your expenditure needs throughout the rest of your life.
When considering how to Its important to account for You’ll need to decide how to convert your assets into income.
The most effective way of doing this is using cash-flow modelling software which will provide visibility over how your money will be drawn from the various pots, and critically, whether this will last for the full duration of your life-time.
What if you already have enough to retire at 50?
Having enough to live the life you want for the full duration of your retirement is a fabulous position to be in however it is important to ensure that unforeseen circumstances are catered for such as a requirement for long-term care or one part of a couple passing away for example.
Aside from this, it is then also worth considering what you might do in terms of legacy planning, to ensure that your loved ones are catered for after your death, and to ensure that your inheritance tax liability is minimised as far as possible to ensure the least amount of additional stress for others when dealing with your estate.
For assistance with estate planning, or for a second opinion over your financial plan, arrange an appointment to speak with one of our financial advisers.
What if you DON'T have enough to retire at 50?
In many cases you might be in a position where you don’t quite have enough. This would be disappointing naturally, however there are several strategies which can help to reach your goal.
Delaying retirement for a short period – it may be that working for an extra few years might help. Not drawing on your savings, combined with continuing to add to the pot, as well as reducing the time until being able to draw the state pension, can have a dramatic effect on the numbers.
Increasing your savings – perhaps for the last few years of working, you could increase the amount you contribute to your pensions, taking advantage of the available tax-reliefs and compounded growth.
Reducing expenditure – this may be combined with the above, by reducing your costs, you might be able to save additional money to spend in retirement.
Assess your investment strategy and asset allocation – Quite often certain workplace pensions gradually move your money into less risky investments, which also generally comes with lower growth potential. Ensuring your investment strategy is aligned with your goals is a key component of retirement planning.
Anniuty vs Drawdown - Which is better ?
This is very dependent on your circumstances and there is no one size fits all answer.
Annuity – generally offers lower or zero returns, in exchange for a guaranteed stable income.
Drawdown – This provides more flexibility and possibility of continued growth, but with a risk of running out of money.
It may be that that a combination of both is a good solution, but again, this is hugely dependent on your individual position and so before deciding engaging with a planner to assess your overall financial position, is recommended.
Common Questions
Q: What about inflation?
Yes, it eats away at purchasing power. That’s why it is important to factor inflation in to any retirement plan, and utilising cash-flow software to do this can make this a great deal easier.
Q: What if markets fall?
This is where cash buffers and flexible spending come in. Avoid large withdrawals in a down market—use cash savings instead. A good drawdown strategy and having a well diversified portfolio will help see you through temporary market declines.
Q: Should I pay off my mortgage before retiring?
Usually yes—but not always. Lower mortgage rates and tax-efficient investing may make keeping it worthwhile.
How Can XV Wealth help you to Retire at 50?
Our team are specialists at helping our clients put together bespoke financial plans, all centred around achieving your retirement goals. If you are looking to see whether you are on track to retire at 50, we can give you clarity and control over this, and your other key life decisions.
Financial Adviser Cheshire and Pension Adviser Chester
XV Wealth are an Independent Financial Adviser based in Chester, Cheshire.
About us: XV Wealth is an independent financial advisor based in Chester. As an independent financial adviser, we can provide independent and unbiased financial advice. We provide independent financial advice, pension advice, investment advice, inheritance tax planning and insurance advice. If you want to speak to a Financial Advisor, we offer an Initial Financial Consultation without cost or commitment. Meetings are held either at our offices, by video or by telephone. Our telephone number is 01244 62 88 71. XV Wealth Financial Advisers email is info@xvwealth.co.uk.
This article is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.
The value of investments and the income from them can go down as well as up, so you may get back less than you invest. Past performance is not a guide to what might happen in the future.
The value of pensions and any income from them can fall as well as rise. You may not get back the full amount invested.
Levels and bases of, and reliefs from, taxation are subject to change and their value will depend upon personal circumstances. Taxation and pension legislation may change in the future.
Drawdown pension plans (unsecured income) are complex and are not suitable for everyone. Pension decisions can affect your income for the rest of your life (and that of any partner and other dependants). Where benefits are accessed on a flexible basis, these are not fixed or safeguarded for life. If security of income is important to you then you should consider purchasing an annuity or taking a scheme pension to provide a secured level of income.
The Financial Conduct Authority does not regulate Cashflow Planning.
