For a long time, and many millions of people, retirement has been a clear-cut moment in life: the last day at work, a gold watch (if you were lucky), a send-off from your colleagues wishing you well, as you stepped into a slower, gentler, pace of life.
But today, that version of retirement feels increasingly out of step with reality. We’re living longer, staying healthier, and expecting more from the years ahead. Simply “stopping work” doesn’t capture the reality, or ambition, of what we now want from our later years.
Retirement is still a major transition, but for many people it’s no longer a single event. Instead, it’s a shift into a new phase of life. It could still include some form of work, but this new phase will also bring new meaning, opportunities, and greater flexibility. And although money remains a central consideration, emotional readiness, wellbeing and purpose become equally important at this time in life.
Why the linear ‘full stop’ model no longer fits many of us
In the past, retirement was fairly fixed. You stopped work, bought an annuity, and that was that. However, it was also a bit of a cliff-edge. And when working for a living gives you a sense of identity, purpose and relevance, losing that overnight can feel unsettling.
Perhaps that’s why more of us are choosing to retire to something, rather than from something. Something that provides the stimulation, connection, and sense of purpose we valued during our working lives. Perhaps, in this respect, the word “retirement” has become redundant!
Choosing fulfilment and flexibility
Retirement has become less of a one-size-fits-all experience. It’s shaped by personality, energy levels, family dynamics, and personal ambitions. There’s no single “right” way to approach it, and your retirement might look very different from your neighbour’s.
You might choose to continue working – perhaps not full time, and not necessarily in an employed role. You could go freelance, carrying on the work you love while gaining the freedom to pick and choose your clients.
Others build a “portfolio” lifestyle or phased retirement: enjoying a mix of part-time work, creative projects, travel, volunteering, or even running a small business that fits around their day-to-day life.
Many are rediscovering long-neglected passions. It might be joining a community choir, teaching a skill they’ve quietly mastered, or dusting off a hobby they’ve always wanted to take seriously. The common thread is agency. Retirement becomes less about stepping back and more about reshaping your place in the world.
It’s a far cry from the traditional version of retirement, and, for many people, a far more enriching one.
The financial and tax implications of flexible retirement
Living a full life in retirement can be incredibly rewarding, but it can also make your financial planning more complicated. Small choices like working one more year, reducing hours gradually, delaying income from your pension, can have meaningful ripple effects on your long-term position.
Here are some key areas to bear in mind.
• Working longer and long-term resilience
Even a modest income for a few extra years can ease the pressure on your pension pot and give your investments more time to grow. It can also help bridge the gap between reducing your workload and taking full retirement benefits.
• How withdrawals affect allowances
This is an area where many people can get caught out. Taking only your tax-free lump sum means you can continue to contribute to your pension.
But the moment you start drawing taxable income, you could trigger the Money Purchase Annual Allowance (MPAA), which permanently lowers how much you can pay into a defined contribution pension each year.
This makes the order in which you access your pension incredibly important. Knowing when to use tax-free cash, when to delay income withdrawals, and how to structure everything tax-efficiently can make a significant difference to the money you have in your retirement and therefore the choices available to you.
• Where the State Pension fits into your wider plan
Even if the State Pension won’t be your main source of income, it still plays an important role in shaping how much you need to personally contribute. Understanding when you’ll receive it, and how it works alongside your other income sources can make it much easier to decide when to draw on different assets.
Everyone’s financial situation is different, and the most suitable approach depends on your lifestyle, income needs, and how you want to spend your time.
How a financial planner helps you design a flexible future
This is where professional guidance becomes more than just useful – it gives you real peace of mind. Many people worry they’ll overspend in the early years of retirement and find themselves short later on. A modern retirement often involves several income sources, shifting priorities, and a fair few tax considerations, so it’s understandable that the decisions can feel weighty.
• Cashflow modelling
Cashflow modelling is one of the most valuable tools your IFA can use when demonstrating what your flexible retirement could look like. It helps you model a number of different scenarios taking into account things like:
- Working part-time for a few years
- Going freelance, with fluctuating income
- Delaying pension withdrawals
- Taking phased pension income
- Adapting spending over time
- Potential windfalls
- Large expenses and their impact on your financial position
Seeing those possibilities mapped out visually is incredibly powerful. It turns “What if?” questions into informed decisions.
• Tax efficiency
Managing your income in retirement can be complicated, as we’ve seen. An independent financial planner can help structure your income from your savings and investments in a way that minimises unnecessary tax and supports the longevity of your money.
They’ll also help you stay on the right side of allowances, thresholds, and rules that can trip people up.
• Estate planning
Most people don’t think of retirement in isolation. They want to consider family, gifting, and the long-term impact of their decisions. Integrating estate planning with your retirement strategy can provide peace of mind that you’re making choices today that support what you hope to leave behind.
Retirement is yours to shape
Retirement today isn’t a single moment or a dramatic cliff edge. It’s a transition, one that can be shaped gradually and intentionally around what’s meaningful to you. There’s no standard template. Instead, you have the freedom to design a modern retirement that balances security, fulfilment, and flexibility.
With thoughtful planning and the right support, you can enter this next phase feeling informed, confident and genuinely excited for what comes next. And Amber River advisers are here to help you create a retirement that’s not only financially resilient, but personally rewarding.
Get in touch
Start the conversation today and take the first step towards a retirement designed on your terms.
To set up an initial appointment with an Amber River financial planner, please call 0800 915 0000, or use our contact form to arrange an appointment.
Disclaimer
The information within this article was correct at the time of publishing, but laws and tax rules are subject to change. Your circumstances and where you live in the UK may also have an impact on your tax treatment.
