£20,000-a-Year ISA Could Build £467,000 in 15 Years for Retirement at 35
Updated
Updated · twelfthmagpie.com · Jul 5
£20,000-a-Year ISA Could Build £467,000 in 15 Years for Retirement at 35
1 articles · Updated · twelfthmagpie.com · Jul 5
Summary
A £20,000 annual Stocks and Shares ISA compounded at 7% could grow from zero to about £467,000 in 15 years, a level Christopher Ruane says could let a 35-year-old retire early.
That target is based on generating £32,700 a year — Pensions UK's moderate retirement standard for one person outside London — from dividends, with the required portfolio falling as yield rises.
At the current FTSE 100 average yield of 3.1%, the income goal would require about £1.1 million; at 5% it drops to £654,000, and at 7% to £467,000.
Ruane cites Dunelm as one possible income-and-growth candidate, noting its 5.6% yield, history of special dividends, 46% five-year share-price fall and valuation of about 11 times earnings.
The example hinges on sustaining a relatively ambitious 7% return or yield, while risks such as a property-market downturn could weaken demand for home furnishings and hit Dunelm's profits.