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Should you retire at 60, or work one more year?

I've modelled the same person retiring at 60 and at 61 with three different pensions: £500,000, £750,000 and £1 million. The £1 million pot gains the most in pounds, but in these projections the £500,000 pot gains the most in years:

£500,000: shortfall moves out by roughly 5 years
£750,000: roughly 3 years
£1 million: roughly 2 years

I explain why, how the State Pension and tax affect the results, and why working "one more year to be safe" isn't always the right answer.

Assumptions: 6% starting withdrawal (used for comparison only, not a recommended rate), 5% investment returns, 2% inflation, current tax allowances and today's full State Pension. These are illustrations, not predictions.

💬 Would you work one more year for extra security, or retire as soon as the numbers allow? Let me know in the comments (please don't share personal financial details).

CHAPTERS

00:00 – Retire now or work one more year?
00:00 – The assumptions behind the modelling
00:00 – £500,000 pension tested
00:00 – £750,000 pension tested
00:00 – £1 million pension tested
00:00 – Why the smallest pot gained the most years
00:00 – What the graphs leave out: your time
00:00 – Market falls and sequence-of-returns risk
00:00 – Conclusion

IMPORTANT INFORMATION

This video is general information only and is not personal financial advice. Examples are illustrative and based on assumptions. Actual returns, inflation, tax and spending may differ. The value of investments can fall as well as rise, and you may get back less than you invest. Tax rules can change and depend on individual circumstances. Consider taking regulated financial advice before making decisions about your pensions or retirement.

Clarity Wealth Limited is authorised and regulated by the Financial Conduct Authority (FRN: 758444) and is registered in England & Wales (10310076) at Beechwood House, Beechwoods Estate, Roundhay, Leeds, LS8 2LQ.

#RetirementPlanning #PensionPlanning #Retirement

I cut the chapters from 13 to 9, so they stay readable on a phone. When you send the .srt file, I'll fill in the times.

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I expected the £1 million pension to benefit most from working one more year.

In pounds, it did.

In years, it came last.

I modelled the same person retiring at 60, then again at 61, with three different pension pots. Same assumptions throughout: a 6% starting withdrawal, 5% investment returns and 2% inflation.

Here's how far one extra year at work pushed back the point where each plan ran short:

£500,000 → roughly 5 years
£750,000 → roughly 3 years
£1 million → roughly 2 years

Why does the smallest pot gain the most?

Because the bigger pot was also funding a bigger lifestyle. And when the State Pension arrives, it covers a much larger share of a £30,000 lifestyle than a £60,000 one.

The size of your pension tells you very little on its own. What matters is what you're asking it to do.

And there's a bigger question that none of the graphs can answer.

"I'll work one more year to be safe" almost always makes the numbers look better. So would two years. Or five.

The better question is: how much safer does it actually make you, and what are you giving up in return?

I've walked through all three scenarios in my latest video. Link in the comments.

Would you work one more year for extra security, or go as soon as the numbers allow?

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Illustrative examples based on assumptions, not personal financial advice. Investments can fall as well as rise. Clarity Wealth Limited is authorised and regulated by the FCA.

#RetirementPlanning #Pensions #FinancialPlanning