After years – if not decades – of careful saving, investing and building financial security, retirement presents a new and often unexpected challenge: learning how to spend the money you’ve worked so hard to accumulate.
We regularly speak with clients navigating this exact transition. Some are newly retired and unsure how to begin drawing from their wealth. Others are several years in but still hesitant to spend what they’ve built. And many are just approaching retirement, unsure how to shift their mindset from one of saving to one of living.
Retirement Is Not Just About Financial Planning – It’s About a Mindset Shift
Many people spend the majority of their lives focused on growing their savings and ‘not touching the pot.’ That discipline is often what enables a secure retirement in the first place. However, retirement is the time to reverse that flow – and start using the resources you’ve spent a lifetime building.
This shift can feel unsettling. Even with substantial assets, it’s common to worry:
- Am I spending too much?
- What if I run out of money later in life?
- What if an unexpected event throws everything off course?
These concerns can often lead to under-spending, particularly in the early years of retirement – when health, energy and opportunities are at their peak. As a result, some people end up missing out on the retirement they truly wanted, while their wealth remains largely untouched.
The reality is, the risk of not enjoying your retirement can be just as real as the fear of running out of money.
Drawing Income from Wealth: Building a Plan to Support Confident Spending
The key to a fulfilling retirement is financial confidence – knowing not just how to draw from your wealth but when and how to do it without the fear of running out. That’s where cashflow modelling becomes such a valuable tool.
It helps build a long-term view of how your income, spending and assets may evolve over time – taking into account the different stages of retirement, your lifestyle goals, inflation and potential unexpected costs.
By modelling various scenarios, it aims to highlight what you may be able to spend comfortably today, while still planning for the future.
Cashflow modelling doesn’t offer guarantees but it can provide greater clarity, helping you make more informed decisions, reduce unnecessary worry and give yourself permission to enjoy the retirement you’ve worked hard to achieve.
Spending with Intention: Planning for Different Phases of Retirement
Retirement isn’t one long stretch of the same lifestyle – it typically unfolds in distinct phases, each with different spending patterns and priorities:
- Early retirement is often the most active phase. Travel, hobbies, family time take centre stage – this is when many people want to make the most of their freedom and health. It can also be the time when people feel most uncertain about how much they can safely spend.
- Mid-retirement usually brings a more settled routine, with spending often tapering as lifestyles stabilise.
- Later retirement may involve higher healthcare or support costs, which are best planned for early, while you still have options and flexibility.
By understanding and planning for these distinct stages, you can approach spending with greater confidence – knowing your long-term needs have been considered and your lifestyle goals factored into the plan.
From Preservation to Purpose: Making the Most of What You’ve Built
There’s no one-size-fits-all approach to spending in retirement – it should reflect your goals, values and the lifestyle you want to lead. But one thing remains clear: your wealth exists to support your life, not remain untouched out of fear or uncertainty.
For many, the focus gradually shifts from preserving every pound to using their money with purpose – whether that means enjoying travel, supporting family or simply maintaining independence and peace of mind. That shift can be emotional as well as financial, especially after decades of saving.
At Two10 Investment Services, we work closely with our clients to align their resources with what matters most to them – helping them explore what’s possible, identify where there’s flexibility and build the confidence to spend with intention rather than hesitation.
Closing Thoughts
Retirement is your time. But for many, fully enjoying it means adopting a new way of thinking about money. Drawing income from your wealth can feel unfamiliar – sometimes even uncomfortable – but with the right planning and guidance, it can become a source of clarity and confidence, rather than concern.
If you’re uncertain about what retirement could look like for you, we’re here to help you explore the possibilities and build a plan that supports the life you want to live.
*Risk warning: Investments can fall as well as rise, and you may not get back the original capital invested.
*These posts are for information only and should not be seen as advice or recommendation to take action. Please seek independent financial advice before taking any action.