What a Financial Planner Does After You Retire

Why Retirement Is When Planning Gets More Complex

Most people assume financial planning is hardest before retirement. In our experience, the opposite is often true.

Once you stop working, the decisions become less forgiving. Withdraw too much too soon and you risk running short. Draw from the wrong account and you hand HMRC money you did not need to. Miss a tax-year deadline and an allowance disappears forever.

This article explains what a financial planner actually does for people who are already retired. We cover the annual review process, tax-year choreography, care-cost planning, estate restructuring and the honest answer to when you probably do not need us.

All figures are 2026/27 unless stated.

The Annual Drawdown Review: What We Actually Look At

A drawdown review is not a performance update dressed up as advice. It is a structured reassessment of whether your plan still holds.

Sustainable withdrawal rates

We model your portfolio against a range of return and inflation scenarios. The question is not “what did markets do?” It is “how long does your money last at this withdrawal rate?”

A commonly cited starting point is 3.5% to 4% of the portfolio per year, adjusted for inflation. But that figure is sensitive to sequence-of-returns risk, particularly in the first five years of retirement. A bad run early matters far more than a bad run later.

We stress-test your plan against poor early returns, higher-than-expected inflation and longevity beyond age 90. If the plan looks fragile, we adjust before the damage is done.

Reviewing income sources in sequence

We look at every income source you have: State Pension (payable from age 67), defined benefit income, annuity payments, rental income, ISA withdrawals and pension drawdown. The order and timing of drawing each source affects your tax position every single year.

We also check whether your withdrawal rate is still appropriate given your actual spending, not the spending you projected five years ago.

Investment strategy in retirement

Your portfolio in retirement is not the same portfolio you needed at 50. We typically segment assets into short-term cash reserves, medium-term lower-volatility holdings and longer-term growth assets. This “bucket” approach reduces the risk of being forced to sell growth assets during a market fall.

We review the balance between buckets annually and rebalance where needed.

For more on how drawdown works in practice, see our retirement planning guide.

Tax-Year Choreography: Which Account to Draw From and When

This is one of the highest-value things a planner does for a retired client. The difference between a well-sequenced and a poorly sequenced withdrawal strategy can be tens of thousands of pounds over a retirement.

Using your allowances every year

The following allowances reset on 6 April each year. Once a tax year closes, they are gone.

• Personal allowance: £12,570. Income below this is tax-free.
• ISA allowance: £20,000. Contributions shelter future growth and withdrawals from tax.
• CGT annual exempt amount: £3,000. Gains below this are free of capital gains tax.
• Dividend allowance: £500. Dividends below this are tax-free.

We plan withdrawals to use as many of these as possible each year, rather than letting them lapse unused.

The 60% effective tax trap

If your income rises above £100,000, your personal allowance tapers away. For every £2 of income above £100,000, you lose £1 of personal allowance. This creates an effective 60% marginal tax rate on income between £100,000 and £125,140.

For retirees with pension drawdown, rental income or investment income, this band is easy to stumble into accidentally. We plan withdrawals to stay below £100,000 where possible, or to use pension contributions or Gift Aid to reduce adjusted net income if the threshold is breached.

Pension versus ISA: which to draw first?

There is no universal answer. It depends on your income level, your estate planning intentions and the 2027 pension-IHT change (covered below).

As a general principle, drawing taxable pension income up to the basic-rate band and supplementing with tax-free ISA withdrawals is often efficient. But the right answer for you depends on your full picture.

Crystallising pension funds and tax-free cash

You can take 25% of your pension as a tax-free lump sum, capped at the lump sum allowance of £268,275. This does not have to be taken all at once. Phased crystallisation, taking tax-free cash in stages, can spread the benefit across multiple tax years and keep income within lower tax bands.

The minimum pension access age is currently 55, rising to 57 in 2028. If you have not yet crystallised your pension, the timing of when you do matters.

We explain crystallised and uncrystallised pensions in more detail in our guide to crystallised pensions.

Illustrative example (figures are illustrative only)

Consider a retired couple, both aged 68. One partner has a defined benefit pension of £14,000 per year and State Pension of £12,548. The other has only a £400,000 drawdown pension and a £120,000 ISA.

Without planning, the second partner might draw £30,000 from the pension each year, paying basic-rate tax on £17,430 of it. With planning, they draw £12,570 from the pension (within the personal allowance) and £17,430 from the ISA tax-free. The annual tax saving is around £3,486. Over ten years, that is over £34,000 retained in the family rather than paid to HMRC.

This is illustrative only and does not constitute personal advice.

Care-Cost Planning

Care costs are the retirement risk most people underestimate. The average cost of residential care in England currently exceeds £50,000 per year. Nursing care is higher. A stay of three to five years is not unusual.

What planning looks like in practice

We model care costs into your long-term cashflow plan from the outset. This means stress-testing your portfolio against a scenario where one or both partners needs funded care for several years.

We look at:

• Whether your assets would be assessed for means-testing and at what threshold.
• Whether an immediate needs annuity (also called a care fees annuity) makes sense if care has already started.
• How the family home is treated if one partner remains living in it.
• Whether lasting powers of attorney are in place, because without them, financial decisions can become legally complicated very quickly.

We do not sell care products directly, but we work with specialists where a care annuity is appropriate and we ensure the financial plan accounts for the risk.

The interaction with IHT planning

Care costs and inheritance tax planning can pull in opposite directions. Giving assets away to reduce an IHT liability may leave insufficient funds to pay for care. We model both risks together rather than treating them separately.

Simplification for a Surviving Spouse

When one partner dies, the surviving spouse often faces a financial picture that is suddenly more complex and more fragile at the same time.

Income typically falls. A defined benefit pension may pay a reduced spouse’s pension. The State Pension does not double up. Meanwhile, the tax position changes because the surviving spouse now has only one personal allowance, one set of allowances and potentially a larger estate for IHT purposes.

What we do before and after bereavement

Before: we ensure both partners understand the financial plan, not just the one who usually attends meetings. We document income sources, account details and what happens to each asset on death.

After: we help the surviving spouse consolidate accounts, review income needs, update the will and lasting powers of attorney, and restructure the investment portfolio for a single-person household.

We also check whether the surviving spouse can inherit unused ISA allowances from the deceased partner. The Additional Permitted Subscription rules allow this, and it is often overlooked.

Pension nominations

Pension death benefits are paid at the discretion of the scheme trustees. They are not governed by your will. We review nomination of beneficiary forms regularly to ensure they reflect your current wishes and family circumstances.

The 2027 Pension-IHT Change: Why Many Estates Need Rethinking Now

From April 2027, unspent pension funds will be included in your estate for inheritance tax purposes. This is a significant change. Currently, pensions sit outside the estate and are one of the most tax-efficient assets to pass on.

What the current position is

Right now, if you die before 75, your pension can be passed to beneficiaries free of income tax and outside your estate for IHT. If you die after 75, beneficiaries pay income tax on withdrawals, but the pension still sits outside the estate.

This has made pensions the last asset many planners recommend drawing from, preserving them for the next generation.

What changes in April 2027

From April 2027, unspent pension funds will be added to your estate and subject to IHT at 40% above the nil-rate band thresholds. The nil-rate band remains £325,000. The residence nil-rate band remains £175,000, giving a combined threshold of £500,000 for a single person passing a home to direct descendants, or £1,000,000 for a married couple using both allowances.

For many retirees with substantial pension pots, this changes the optimal drawdown sequence entirely. Drawing from the pension first, rather than last, may now reduce the overall tax burden on the estate.

The Business Relief cap

From April 2026, Business Relief is capped at £2.5 million. Estates that relied on AIM shares or unlisted business interests to shelter large sums from IHT need to revisit those plans.

What we are doing with clients now

We are modelling the 2027 change for every client with a meaningful pension balance. For some, the optimal strategy shifts to drawing pension income earlier and preserving ISA assets instead. For others, gifting strategies or trust arrangements become more relevant.

The right answer depends on your age, health, income needs, family structure and the size of your estate. There is no single correct response, but doing nothing is rarely the right one.

You can read more about our approach to retirement planning on our retirement planning service page.

When You Probably Do Not Need Ongoing Advice

We believe in being honest about this. Ongoing financial planning is not right for everyone.

You may not need a financial planner if:

• Your income is entirely from a defined benefit pension and State Pension, with no investment decisions to make.
• Your estate is well below the IHT thresholds and is unlikely to grow above them.
• You have no drawdown pension, no significant investment portfolio and no complex tax position.
• Your financial affairs are simple, stable and unlikely to change.

In these cases, a one-off review every few years, or at a major life event, may be all you need. We offer one-off consultations as well as ongoing relationships, and we will tell you honestly which we think is appropriate for your situation.

Where ongoing advice does add value is when your situation involves multiple income sources, a drawdown pension, a meaningful estate, care-cost risk or the kind of tax-year decisions that compound over time. The value is not always visible in a single year. It accumulates.

Talk to Us

We are Frazer James, chartered financial planners based in Bristol. We work with people who are already retired and want to make sure their money is working as hard as it should be.

If you would like to talk through your situation, with no obligation and no jargon, we would be glad to hear from you.

Book a free consultation with Frazer James and let us show you what good retirement planning actually looks like in practice.

About The Author

Chris Hindle

Chris is the Co-Founder and a Chartered Associate at Frazer James Financial Advisers. With over a decade in financial planning, he specialises in research, technical analysis, and firm operations, helping ensure clients receive clear, well-structured financial advice.

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