What conquering Mount Everest can teach you about your income in retirement


A 2008 study by the British Medical Journal found that of the 212 deaths that occurred on Mount Everest between 1921 and 2006, 192 (over 90%) were above base camp.

More than half of those who climbed higher than 8,000 metres died on their descent from the 8,850-metre summit. 17% died after turning back short of the apex.

The report backed up a common understanding among climbers – that coming back down is more dangerous than going up.

But what does this have to do with your pension income in retirement?

The accumulation phase of your retirement planning is the easy part

You’ll have spent years contributing to your pension, building a pension pot sufficient to sustain your desired lifestyle throughout retirement. This is known as the ‘accumulation’ phase.

To reach the summit of Everest, Alpine Ascents International confirm that you must be in ‘top physical, emotional, and psychological condition’ and that even as an experienced hiker and climber you will need ‘to train specifically for your climb of Everest for at least a year.’

Your career-long pension contributions and that final push to retirement are, for the purposes of this analogy, your Everest ascent, beyond base camp and onto the summit – the highest point on Earth.

You could be forgiven for thinking that the hard work has been done, that your need for advice (or your Sherpa guides) was over. But as the British Medical Journal study tells us, that would be a mistake.

Managing your pension income through the ‘decumulation’ stage – the treacherous descent – can be equally difficult.

You need to be able to enjoy the standard of living you planned for, factor in additional expenses like the cost of later life care and be sure that you leave enough money behind to provide a legacy if you so choose.

Managing decumulation can be perilous

Those who reach the summit of Mount Everest will be exhausted. But leaving enough energy to effectively manage the descent is crucial if it is to be navigated successfully.

As life expectancies continue to rise, you might retire and still have 30, or even 40 years, through which to manage your income.

Back when your only retirement choice was an annuity, this was arguably easier. Your pension paid a set amount for life – rising annually to combat inflation (if you were lucky) – and budgeting was therefore simple.

Pension Freedoms have given retirees enormous choice and flexibility, but they’ve also made your job harder and the need for guidance throughout later life even more important. Here are some areas where financial advice in retirement could help you.

  • Phased retirement

Having reached the summit of Everest, maybe you want to stay there a while and enjoy the view? The move from work to retirement used to be a ‘cliff-edge.’ You went to work one day and didn’t the next.

That traditional route into retirement, though still popular, is no longer the only option. Phased retirement has become increasingly popular as retirees ease themselves into retirement.

It can allow you to supplement your retirement income, whether out of necessity or to pay for additional luxuries. It can also give you time to prepare mentally, keeping you socially active, and helping you to find a work-life balance that suits you.

  • Managing Flexi-Access Drawdown

Flexi-Access Drawdown gives you control over the income you take from your pension pot. It also puts the emphasis on you to make sure you don’t run out of money.

You’ll likely be more active in the early years of your retirement. You’ll be younger, fitter, and wanting to make the most of life after work. Your discretionary expenditure might be higher during these years.

Remember, though, that your retirement pot might need to last 40 years.

In the same way that Sherpas use their years of experience to lead mountain climbers down from the summit, we are here to help you. Moneyfacts state that those who don’t take Drawdown advice are three times more likely to run out of money.

We can help you work out where each income stream and potential outgoing fits into your overall plan, helping you to safely navigate decumulation.

  • Managing your estate

Like the craggiest mountain pass, living your desired lifestyle in retirement while leaving some but not too much money behind for loved ones, can be a tricky balancing act.

Which? confirms that Brits paid £5.4 billion in Inheritance Tax (IHT) in 2018, with the average left in cash being £69,000. Large cash amounts can lose value in real terms due to inflation, but, more importantly, could see your loved ones hit with a large IHT liability.

Managing your estate in later life can make a huge difference. We can help so get in touch.

Get in touch

Reaching retirement is your summit of Everest after decades of hard work, but coming down off the mountain can be treacherous. Speak to us and we can be there to guide you down, helping you to decide when you take the plunge, how you withdraw your income, and how much you leave behind.

If you’d like to discuss how to manage your income in retirement, get in touch. Please email info@investmentsense.co.uk or call 0115 933 8433.

Please note

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The value of your investment (and any income from them) can go down as well as up which would have an impact on the level of pension benefits available.

The tax implications of pension withdrawals will be based on your individual circumstances. Levels, bases of, and reliefs from taxation may change in subsequent Finance Acts. The Financial Conduct Authority does not regulate tax advice or estate planning.