Measure Twice, Retire Once: Why a Retirement Plan Matters
A number on its own is a guess dressed up as a plan. What actually goes into building one that holds up.
Ask most people how much they need to retire on, and you’ll usually get a number that sounds reasonable but has very little behind it. $100,000 a year. $80,000. Whatever feels roughly right. It’s not that the number is wrong exactly, it’s that nobody’s checked it against anything. No assumptions, no stress test, no real sense of whether it holds up over 25 or 30 years of retirement.
For clients with ties to more than one country, this gap tends to be wider still. International pensions, overseas state entitlements, and cross-border accounts are the parts of a plan most easily overlooked, not because they don’t matter, but because they rarely sit neatly inside a single spreadsheet or a single adviser’s usual remit. A number built without them isn’t just rough, it’s often missing entire sources of income the client is genuinely entitled to.
This is the gap a proper financial plan is built to close. Not by replacing your judgement with ours, but by giving you something to actually test that judgement against, and by making sure nothing that’s rightfully yours gets left out of the picture.
Start with the life, not the number
Before any figure gets written down, the real starting question is what retirement actually looks like day to day. A useful way to think about this is in three tiers: needs, wants, and wishes.
Needs are the costs that don’t flex, housing, healthcare, everyday living, the things that have to be funded regardless of how markets perform in any given year. Wants sit above that, the things that matter to quality of life but could be scaled back if a plan came under real pressure, more travel, a higher standard of living day to day. Wishes are the furthest out, a second property, a boat, a legacy left behind, genuinely important, but the first things a plan can flex on if it needs to.
This distinction matters because it changes the question a plan actually needs to answer. Rather than “does my plan work,” a properly built plan asks: does it cover my needs with near certainty, and how confident can I be about my wants and wishes on top of that. That’s a far more useful answer than a single yes or no.
Take stock of everything, not just what’s easy to see
For clients with US and UK ties, this step is bigger than it looks. It means US retirement accounts and Social Security, yes, but also UK pensions, the UK State Pension, and in some cases pension entitlements from other countries entirely. We’ve worked with people who spent time living and working elsewhere in Europe and had no idea they’d built up an entitlement there, or simply didn’t know what it was worth. We’ve worked with others who assumed their UK State Pension would be smaller than it actually turned out to be, simply because nobody had checked their National Insurance record properly.
This is precisely where international planning tends to fall through the cracks. A US-based adviser with no UK expertise may never think to ask about a State Pension forecast. A UK-based one may have no visibility into US Social Security timing or Roth eligibility. The client sits in the middle, and the parts of the picture that don’t fit neatly into either adviser’s usual scope are the parts most likely to be missed, understated, or simply guessed at. None of this needs to be guesswork. It’s a matter of pulling the right documents and requesting the right estimates, and it genuinely changes the final number, sometimes by a meaningful amount in either direction.
What stress-testing actually means, and what a confidence score tells you
This is where a plan earns its name. Once we know what your retirement needs to fund, and everything you have and are owed, the next question is whether the two actually meet, not just today, but across a retirement that could last three decades.
Our planning software runs a Monte Carlo simulation, testing your numbers against thousands of different possible market futures rather than one straight-line projection. That means genuine variation in investment returns and the order they arrive in: markets falling hard in the first few years of retirement rather than the tenth, a prolonged downturn, a stretch of high inflation eating into purchasing power faster than expected. We can flex the other assumptions too, how long you might live, what a health cost might look like, so you can see how sensitive your plan is to those as well. Some of these thousands of simulated futures your plan comfortably survives. Others it doesn’t. The proportion that succeed is your confidence score, a genuine likelihood, built from thousands of realistic scenarios, not a straight-line guess dressed up as certainty.
A score in the 80s or 90s generally suggests a plan is well-positioned to cover what you need, even allowing for a reasonable run of bad luck. A lower score doesn’t mean failure, it means there’s a gap worth understanding and, in most cases, closing.
The playzone: seeing the effect before you decide
Once you have that starting point, the real value of working with a planner is being able to sit down together, move the pieces, and watch what happens, in either direction, before committing to anything.
What if you retired two years earlier? What if you kept working a little longer instead? What if you increased what you’re saving starting today? What if a Roth conversion, an annuity, or a change to your investment allocation could meaningfully shift your position? We can show you the actual effect of each of these on your confidence score, in real time, sitting across from you, using the same screen you’re looking at, rather than asking you to imagine it or wait weeks for a revised projection. It’s genuinely a space to play with your own numbers and see the consequences honestly, before any decision is made.
Where we come in: finding the areas worth improving
If a confidence score comes back lower than you’d like, the next question is where the improvement should come from. That’s a large part of what a planner actually does day to day, working through the levers available to you and identifying which ones move the number most, without simply telling you to save more and hope for the best.
Sometimes it’s a timing decision, adjusting when Social Security or a pension is drawn. Sometimes it’s a structural one, how assets are allocated between growth and stability given your specific timeline. Sometimes it’s a genuine strategy, a Roth conversion carried out in lower-income years, or an annuity used to guarantee the “needs” tier of spending so market performance only has to cover the “wants” and “wishes” above it.
A few things worth thinking through properly
One of the more useful ideas in this kind of planning is separating spending into three tiers, needs, wants, and wishes.
Needs are the costs that don’t flex, housing, healthcare, everyday living, the things that have to be funded regardless of how markets perform in any given year. Wants sit above that, the things that matter to your quality of life but could be scaled back if a plan came under real pressure, more travel, a nicer standard of living day to day. Wishes are the furthest out, a second property, a boat, a legacy left behind, genuinely important to you, but the first things a plan can flex on if it needs to.
The reason this distinction matters is that it changes how a plan gets stress-tested. Rather than asking “does my plan work,” the real question becomes “does my plan cover my needs with near certainty, and how confident can I be about my wants and wishes on top of that.” That’s a far more useful answer than a single yes or no, and it’s usually the moment a plan stops feeling abstract and starts feeling like something built specifically around your life.
A plan is not a prophecy
It’s worth being honest about what a plan can and can’t promise. No amount of modelling can predict the exact year a market will fall, or precisely how long any individual will live. A plan isn’t a fixed prophecy that gets followed to the letter for thirty years, and treating it as one would be a disservice, life changes, and a good plan changes with it.
What a properly built, stress-tested plan can do is answer the two questions that actually matter. Will I outlive my money. And do I need to change anything right now. Those are honest, answerable questions, and getting a clear answer to them, revisited regularly as circumstances shift, is worth far more than a single number that was never really tested in the first place.
The bottom line
A number on its own is a guess dressed up as a plan. A genuinely good one starts with the life you want, accounts for everything you have and are entitled to internationally, tests it honestly against real risk, and stays flexible enough to move with you as things change. For anyone with financial ties to more than one country, that international completeness isn’t a nice extra, it’s often the difference between a plan that’s accurate and one that simply looks tidy.
If you’d like to see what this looks like against your own numbers, Damien and I are always happy to talk it through.