Adapted for UK investors from Christine Benz’s Morningstar article, “Why I Object to ‘Hitting a Number’ for Retirement”, published 6 July 2026. Christine Benz has kindly given permission for extracts from the original article to be used.
For many people approaching retirement, there is a strong temptation to focus on one question:
“How much do I need before I can afford to retire?”
That often develops into a target figure: £500,000, £1 million, £1.5 million or some other number which, once reached, is assumed to mean retirement is financially secure.
Christine Benz, Morningstar’s Director of Personal Finance and Retirement Planning, argues that this way of thinking can be dangerously simplistic. As she puts it, “There’s a lot more to retirement planning than a high portfolio value.”
Her concern is not that having a financial target is wrong. Rather, the problem arises when the value of the investment portfolio becomes the retirement plan.
A portfolio value is only the starting point
A commonly used rule of thumb is to assume that around 4% of a portfolio can initially be withdrawn each year. This can be useful when retirement is still some years away, but Benz argues that anyone approaching retirement needs to go much further.
A £1 million portfolio, for example, may sound substantial. But whether it is sufficient depends on how much income someone requires, how long retirement lasts and what other income will become available.
For a UK investor, that means considering not just pensions and investments but also the State Pension, defined benefit pensions, annuity income, earnings from part-time work and potentially rental or other income.
Benz suggests that a proper retirement plan should incorporate expected spending, non-investment income, investment strategy, taxation, inflation and investment costs. If confidence about retirement rests primarily on the value of the portfolio, she argues, that is a sign that a more comprehensive plan is required.
The timing of retirement matters
Another important issue is sequence of returns risk.
This is the danger that someone retires immediately before a major fall in investment markets and is forced to make withdrawals while investments are depressed.
Benz highlights Morningstar research showing how damaging poor returns early in retirement can be. Poor returns early in retirement may reduce portfolio sustainability, particularly where withdrawals are being made at the same time.
This is particularly relevant after strong stock-market performance. Ironically, the moment when investors feel wealthiest can sometimes be the point at which their portfolio is most vulnerable to a market correction.
The practical message is not that investors should attempt to predict market crashes or delay retirement indefinitely. Instead, retirement portfolios should be constructed so that short-term market movements do not determine whether the plan succeeds.
For UK retirees, that may mean holding a suitable allocation to cash, short-dated bonds or gilts alongside equities, rather than entering retirement with almost everything invested in shares.
Benz makes a particularly useful observation: investors who believe they have finally “hit their number” might consider moving some of those gains into lower-risk assets rather than continuing to take the same level of investment risk. Lower-risk assets, such as cash or short-dated bonds or gilts, may help manage volatility but are not risk-free and may not keep pace with inflation.
Retirement planning is also about spending
One weakness of having a single retirement number is that it treats expenditure as if it were fixed.
In reality, retirement spending can change considerably over time.
Many retirees spend more during the early years when they are travelling, socialising and pursuing hobbies. Expenditure may subsequently fall before potentially rising again later in life because of health or care costs.
A good retirement plan should therefore model spending rather than simply applying a fixed percentage withdrawal to a pension pot.
It should also allow flexibility. If markets suffer a severe fall, temporarily reducing discretionary withdrawals may help improve the sustainability of a portfolio.
The most important questions may not be financial
Perhaps the strongest part of Benz’s argument is that deciding when to retire should not revolve solely around money.
She draws on the concept of “the three haves”, discussed with Maria Bruno of Vanguard in Benz’s book How to Retire.
They are:
- Do you have enough? Is the financial plan sustainable?
- Have you had enough? Are you genuinely ready to finish work?
- Will you have enough? Do you have enough purpose, structure, relationships and activities to create a fulfilling retirement?
Benz regards the final question as particularly important. Retirement can remove not just employment income but also routine, identity, social interaction and a sense of purpose. Successful retirees therefore spend time thinking about what they are retiring to, rather than simply what they are retiring from.
The better retirement question
Instead of asking:
“Have I reached my retirement number?”
a more useful question may be:
“Do I have a financial and lifestyle plan that is robust enough to support the retirement I want?”
That means understanding future expenditure, guaranteed income, tax, inflation, investment risk and the effect of poor markets — but also thinking seriously about how life will actually look once work stops.
A retirement portfolio is important.
But, as Christine Benz’s article reminds us, the portfolio is only one component of a successful retirement.
The value of investments can fall as well as rise and you may get back less than you invest. Pension and retirement planning decisions can affect tax, benefits, and the sustainability of your income.
This article is for general information only and does not constitute personal financial advice. Please seek regulated financial advice before making decisions about your pension, investments, or retirement income.
Acknowledgement
This article is based on and adapted from Christine Benz’s “Why I Object to ‘Hitting a Number’ for Retirement”, Morningstar, 6 July 2026.
Christine Benz is Director of Personal Finance and Retirement Planning at Morningstar and author of How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement.