I plan to fund my retirement by generating a regular passive income from a portfolio of FTSE 100 shares.
A Stocks and Shares ISA feels like the ideal home for those shares, because all my growth and dividends will be free of tax for life. If I could generate an income of £1,750 a month, I’d be more than happy. That works out as £21,000 a year. So how much do I need to generate that kind of income?
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The answer depends on the yield achieved. Here’s the rough amount required:
4% yield: £525,000
5% yield: £420,000
6% yield: £350,000
As those figures show, a higher yield dramatically reduces the amount needed. Thankfully, plenty of FTSE 100 shares offer generous income today. One stock I wish I’d bought years ago is insurer and asset manager Aviva (LSE: AV). It currently offers one of the highest trailing yields on the blue-chip index at 6.3%.
Can Aviva keep paying such a generous income?
The Aviva share price has had a good run too, climbing 55% over five years. All dividends are on top. However, momentum has slowed. Over the last 12 months, the stock is up just 2.6%.
The Iran conflict has rattled markets. Investors worry that rising oil prices could push inflation higher again, which may keep interest rates elevated for longer and hit economic growth. That uncertainty has left Aviva looking a little choppy, despite several years of steady pre-tax profit growth.
Link: https://uk.finance.yahoo.com/news/much-isa-earn-1-750-061700593.htmlhttps://uk.finance.yahoo.com/news/much-isa-earn-1-750-061700593.html