People in their 50s can feel like they are at a financial crossroads. Retirement is no longer a vague idea on the horizon – it’s a looming milestone that demands clarity, planning and emotional readiness.
If savers start to feel a sense of urgency, they should know that they can always start saving more or at the very least making a plan for retirement, according to Lydia Richmond, financial planner at Finura.
“It’s never too late to start. But now is the time to really ask: what have I got, how is it invested, and what will it actually mean for the lifestyle I want?”
This shift in mindset is critical. While younger savers can afford to course-correct over decades, time is no longer a luxury. Gush Verdding, chartered financial planner at the firm, noted: “The consequences of getting it wrong in your 50s are greater than getting it wrong in your 30s. A 10% market dip in your 30s is frustrating. At 55, it can have all sorts of emotional implications.”
That makes proper analysis essential. Lifestyle cashflow modelling – a staple in financial planning – becomes a vital tool at this stage. “We are not just looking at what your pension pot is worth,” said Verdding. “We are asking: if you retired at 65, what income would that actually give you and does it match the life you want?”
Both planners stressed that reviewing your existing arrangements is the priority. That could mean consolidating scattered pension pots or considering when you want to retire.
“People in their 50s must start to visualise their future in a real way,” said Richmond. “How will I feel if I can’t hit my goals? How do I feel about stepping away from work altogether?”
That emotional adjustment can be harder than expected. “Work is a huge part of your identity, especially if you’ve been in the same job for decades,” said Verdding. “People are used to a regular pay check. Giving that up is a big psychological hurdle.”
This is where a lot of the assumptions usually associated with retirement don’t meet reality. More and more people phase into retirement gradually. That might mean dropping to a four-day week, for example.
“Retirement isn’t a hard stop,” said Verdding. “People think they’ll leave work at 65 and never earn again, but in reality most continue working in some form.”
That phased mindset also shapes how portfolios are structured. Rather than adopting a rigid ‘lifestyling’ glidepath (an automated de-risking feature of pensions, which tries but fails to be a one-size-fits-all tool), the planner said it’s much more realistic for most people to segment retirement income into buckets.
“You might want your first few years of expenses in cash-like funds that can ride out any market volatility,” said Verdding. “Then you have a medium-term pot, and a longer-term pot with more equity risk. That gives clients peace of mind – if markets drop 15%, they know they won’t need to sell their equities any time soon.”
This kind of customisation matters more than ever, as risk appetite becomes more personal when savers turn 50. “Some clients are fine staying in equities,” Richmond said. “Others aren’t. That’s where advice really comes into its own.”
While some clients may have been self-managing their pensions up to this point, both advisers urged anyone in this age group to get professional input, even if it is just for a first consultation.
“You’ve been working all your life to build this up, and now you have to make it last,” Verdding said. “You don’t know how long you’ll live, whether you’ll need care, or whether your goals will shift. The stakes are higher now.”
For those still in work, there’s also scope to tweak contributions – especially if employers offer matching – and re-test the plan to see the difference it makes.
But it’s not all just about saving. Your 50s are also the time to kick back and be spending some of the money to achieve the things on your bucket list.
“There isn’t an infinite clock on the wall. As you get older, your ability to travel to South Africa and do an all-inclusive Safari might be as high as it was,” Verdding said.
“Let’s remember that at this point in time, if retirement is going to be at 65 or 67, you've still got 15 or 17 years to play with. Let's not discount that.”
Previuosly in this series, we covered pension planning for people in their 40s, 30s and 20s.