£500 a month beat a second salary

I spent this week playing with my own retirement numbers, and the change that mattered most was the one I least wanted to make.

The question was simple. If Jenny and I stopped work earlier than we had planned, what would actually make the money last? Same pensions, same markets, one change at a time, and the calculator counting how many of 100 futures still pay every year to age 85.

What moved it, biggest first

Why £500 a month is so big

£500 a month is £6,000 a year. Over thirty years of retirement it outweighs two years of a second salary, and by a distance: 57 futures against 35 in my plan.

It is not the size of any one year. A salary arrives for two years and stops. A lower spend goes on every year, and every pound not spent is a pound that does not have to be sold when markets are down. In the futures that fail, that is exactly how they fail: a bad few years early on, with the plan selling shares at the bottom to pay for the same life as before. Spending a little less is the one change that helps in every one of those years at once.

Nobody wants to hear that the lever is their own spending. I did not either. But it is the honest answer, and it is worth knowing before you spend months worrying about fund choices that move the number by one or two.

The mortgage: a wash on the odds

I had assumed clearing the mortgage would help. The model says it barely matters. The mortgage costs about 5%, and the pension is expected to earn about 5.5%, so moving money from one to the other leaves the odds where they were, within one future either way.

We are going to clear it anyway, for two reasons the odds do not capture. A certain 5% beats an expected 5.5% once the salaries stop, because the 5.5% is an average and the bad years are the ones that matter. And the monthly payment disappears in exactly the years when nothing else is coming in, which makes every other decision in those years easier.

Tax-free cash is the cheapest money a pension will ever give you. Using some of it to clear a debt that costs 5% is not a clever trick, it is just tidy. Check for an early repayment charge first; if your fix ends soon, waiting for the end of it can be worth more than the interest saved.

What I take from it

If you are modelling your own plan, test your spending before anything else. Try your number, then £500 a month less, then £500 more, and look at how far the count moves. Then try the other things: working longer, a downsize, the mortgage. You will probably find, as I did, that the lever nobody wants to touch is the one that works.

To try the same four on your own numbers: in the planner, set your spending, then add spending steps, a second income for a set number of years, and a one-off cost or windfall. Each change shows how many of 100 futures last.

My own plan, 24 October 2026: my own pots, 5.5% average growth with the calculator's usual swings, State Pensions at 67, spending stepping down at 70 and 80, a downsize in 2035, 1,000 futures. Not advice. I am not a financial adviser.