Setting Up Phased Retirement

Phased retirement — moving gradually from full-time work to full retirement — can be modelled in the Finance Planner using a combination of three features. Here’s how to set it up.

STEP 1 — SET YOUR FULL RETIREMENT AGE (Module 1)

Start by setting your Planned Retirement Age in Module 1 to the age at which you plan to fully stop working. This is the point the planner uses as its main target — when pension pots are valued, when drawdown begins, and when your State Pension is assumed to start.

Your phased period is modelled as adjustments leading up to that date.

STEP 2 — MODEL REDUCED HOURS IN A FINAL SALARY SCHEME (Module 4)

If you have an active defined benefit (DB) or final salary pension, use the Step-down option to tell the planner you plan to move to reduced hours before fully retiring.

1. Go to Module 4 — DB Pensions and open your active scheme.
2. Enable the Step-down toggle.
3. Enter the age at which you’ll reduce hours and your reduced salary from that point.

The planner adjusts your future pension accrual from that age — a lower salary means a smaller pension building up in those final years, reflecting what a phased arrangement produces.

STEP 3 — MODEL PAUSED CONTRIBUTIONS IN A DC PENSION (Module 3)

If your phased arrangement means you’ll stop making pension contributions for a period, use the Career Break feature in Module 3.

1. Go to Module 3 — DC Pensions and open the relevant pot.
2. Enter a Career Break Start Age and End Age.

During a career break your pot continues to grow at the assumed rate — contributions pause but investment growth continues. If you’re still contributing but at a lower rate, update your salary and contribution percentages in Module 3 instead.

STEP 4 — ADD PART-TIME INCOME AS A BRIDGE (Module 8)

Part-time or consultancy income during a phased period is temporary, so it should not go in Module 6 — that module assumes income continues indefinitely. Instead, add it as a recurring event in Module 8.

1. Go to Module 8 — Life Events.
2. Add a Recurring Income event with an annual amount, start age, and end age (matching your Module 1 retirement age).

The planner includes this income only for those years, then removes it automatically.

CHECK YOUR RESULTS

Once all elements are in place, go to Module 10 — 25-Year Projection to see the full picture. You’ll see assets, income, and spending year by year — including the transition period. Module 7’s live sliders let you test adjustments in real time.

RetirePlan — retireplan.co.uk | Using 2026/27 UK tax rates | This tool provides guidance only and does not constitute regulated financial advice.