{"id":250198,"date":"2026-01-17T22:10:09","date_gmt":"2026-01-17T22:10:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/250198\/"},"modified":"2026-01-17T22:10:09","modified_gmt":"2026-01-17T22:10:09","slug":"if-a-55-year-old-puts-1000-a-month-into-a-sipp-heres-what-they-could-have-by-retirement","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/250198\/","title":{"rendered":"If a 55-year-old puts \u00a31,000 a month into a SIPP, here’s what they could have by retirement"},"content":{"rendered":"

\"Woman<\/p>\n

Image source: Getty Images<\/p>\n

A Self-Invested Personal Pension (SIPP) is a powerful way of building wealth and takes very little effort to set up. Yet, a third of Britons don\u2019t have a retirement plan. But it\u2019s never too late. Fortunately, there\u2019s plenty of time for a 55-year-old to build up a decent fund to help provide for a more comfortable old age. Here\u2019s one approach.<\/p>\n

Possible outcomes<\/p>\n

Of course, leaving it late isn\u2019t ideal. But someone investing \u00a31,000 a month for five years \u2013 assuming an annual growth rate of 5% \u2014 could still have a pension pot of \u00a368,090.<\/p>\n

Obviously, saving more for longer \u2014 at a higher growth rate \u2014 should achieve a better result. The table below shows what can be achieved over different periods with various rates of return.<\/p>\n

Annual return\/period5 years10 years15 years5%68,090154,992265,9036%69,824163,264288,3087%71,598172,018312,8638%73,413181,283339,778Source: Hargreaves Lansdown\u2019s investment calculator<\/p>\n

What next?<\/p>\n

Once an individual reaches retirement age, they have a number of options available to them.<\/p>\n

For example, they could follow the \u20184% rule\u2019, which essentially involves drawing down 4% of their investment pot each year. In theory, this means the fund could last 30 years.<\/p>\n

Alternatively, they might prefer to purchase an annuity, which will pay out a guaranteed sum for life.<\/p>\n

Another possible approach is to retain the capital and buy dividend shares.<\/p>\n

In my view, before deciding on the best strategy to adopt, I think it\u2019s a good idea to seek professional advice. Everyone\u2019s individual circumstances are different, so there\u2019s no \u2018one-size-fits-all\u2019 approach.<\/p>\n

What am I doing?<\/p>\n

Personally, I\u2019m always looking for dividend shares for my SIPP.<\/p>\n

And one I like is Legal & General (LSE:LGEN<\/a>).<\/p>\n

At the moment (16 January), it\u2019s the highest-yielding<\/a> on the FTSE 100. But a yield of 8.1% could be a sign that investors believe its dividend might be cut soon. Sometimes, things just look too good to be true.<\/p>\n

However, the pension and savings group\u2019s directors intend to increase it by 2% a year up until 2027. But as well as a rising dividend \u2014 in cash terms, it\u2019s increased 22% since 2020 \u2014 there\u2019s another reason for its massive yield. Namely, the group\u2019s disappointing share price performance \u2013 it\u2019s gone nowhere since January 2021.<\/p>\n

Of course, it\u2019s impossible for a company to give guarantees when it comes to its dividend. However, Legal & General\u2019s track record is impressive. It last cut its payout during the global financial crisis in 2009. And to the credit of the management team, it was able to keep it unchanged at the height of the pandemic in 2020.<\/p>\n

Of concern, the group faces increased competition from some new entrants to the market. These tend to have a lower cost base, which helps them undercut their large rivals. Also, the income that it generates from its \u00a3500bn+ of investments will fall during periods of market volatility. This could adversely impact the group\u2019s earnings and its dividend.<\/p>\n

Weighing everything up<\/p>\n

However, the group has a strong balance sheet,<\/a> recognisable brand, and easily meets the minimum solvency requirements of the industry regulator. It also has an impressive pipeline of new business that it\u2019s looking to win. It says it\u2019s on track to take over and manage \u00a350bn-\u00a365bn of pension schemes from 2024-2028.<\/p>\n

For these reasons, I think Legal & General\u2019s a stock for 55-year-olds and others to consider. But it\u2019s just one of many UK companies that offer attractive dividends at the moment.<\/p>\n","protected":false},"excerpt":{"rendered":"Image source: Getty Images A Self-Invested Personal Pension (SIPP) is a powerful way of building wealth and takes…\n","protected":false},"author":2,"featured_media":168212,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175],"class_list":{"0":"post-250198","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-ie","11":"tag-ireland","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/250198","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=250198"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/250198\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/168212"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=250198"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=250198"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=250198"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}