Can you retire at 60 with £400k?
Falls short On our model, a 60-year-old retiring today with a £400,000 pot could draw a sustainable income of about £25,600 a year (£2,140 a month) in today’s money, holding that spending power the whole way to age 95. That’s below the £32,700 the PLSA links to a ‘moderate’ retirement, though well clear of the ‘minimum’ standard — roughly £7,100 a year short. Either way you’d be bridging 7 years on your own savings before the State Pension starts at 67.
What the projection shows
The £25,600 a year sits between the PLSA’s minimum and moderate standards — roughly £7,100 short of a ‘moderate’ lifestyle. It covers the essentials comfortably, but leaves less room for the extras (bigger holidays, running two cars) that the moderate figure builds in.
For the 7 years between finishing work at 60 and the State Pension arriving at 67, every penny of income comes from your own pots. That first year the tax bill is modest — around £7,500 on £67,000 of gross withdrawals, an effective rate of about 11% — because a quarter of each SIPP withdrawal is tax-free and the taxable slice mostly sits in the basic-rate band.
From 67 the full new State Pension — about £11,502 a year in today’s money, and triple-locked so it broadly keeps pace with prices — covers roughly 45% of your £25,600 target on its own. From that point your pots only have to find the rest, so they stretch a good deal further than they do in the bridge years before it starts.
The plan is designed to run the pots down to roughly zero by age 95: both the £280,000 SIPP and the £120,000 ISA are put to work rather than left as a large estate. If leaving something behind matters to you, you’d take a little less each year.
At 60 you have unrestricted access to both pots and only 7 years to bridge before the State Pension starts at 67 — the most forgiving combination on this grid. A short bridge means far less of the outcome rides on early investment returns, which is the single biggest risk in an early-retirement plan. The £120,000 ISA could fund that gap almost entirely on its own, leaving the SIPP untouched and still growing until the State Pension is in payment.
Putting the shortfall in pot terms rather than income: at 60 you’d need around £570,000 to reach the £32,700 moderate benchmark, against the £400,000 modelled here — a gap of roughly £170,000. That framing is often more useful than the income gap, because it tells you what another few years of contributions and growth would have to deliver to change the answer.
Over the full 36-year plan the model projects roughly £128,000 of income tax in total — an average of about £3,600 a year, though it is not spread evenly. The bill is lightest in the bridge years, when the 25% tax-free element of each SIPP withdrawal does the most work, and steps up once the State Pension starts at 67 and occupies most of your personal allowance on its own. From that point every pound drawn from the SIPP is taxable from the first penny.
What would close the gap? On the same assumptions, starting with £600k instead, would lift the sustainable income past the £32,700 moderate benchmark.
Questions people ask
Can I retire at 60 with £400,000?
On our model, not quite. A £400,000 pot at 60 supports a sustainable income of about £25,600 a year (£2,140 a month) in today’s money, held to age 95. That is £7,100 a year below the £32,700 the PLSA links to a moderate single-person retirement.
How much income would £400k give me at 60?
Around £25,600 a year, or £2,140 a month, net and in today’s money — the most the pot can pay out while still lasting to age 95 on the assumptions below. The figure is split £280,000 in a SIPP and £120,000 in an ISA.
What happens when the State Pension starts?
You’d fund the first 7 years entirely from your pots, then from age 67 the full new State Pension — about £11,502 a year in today’s money — begins and takes much of the pressure off your savings for the rest of the plan.
How much difference would another £100k make?
At 60, going from £400k to £500k lifts the sustainable income from about £25,600 to £29,700 a year — a gain of roughly £4,100 a year, every year, for the rest of the plan. That is the return on working a little longer or saving a little harder before you stop.
See what £400k supports at every retirement age →
Run your own numbers
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