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Image source: Getty Images<\/p>\n
Many of us (including myself) worry about the level of support the State Pension will offer in retirement. How large will it be, and at what age will I be able to claim it?<\/p>\n
In fact, will the State Pension even be around two to three decades from now?<\/p>\n
These aren\u2019t worries I\u2019m prepared to sit back and accept while I have time to do something about it. I\u2019m taking steps today to help me become totally financially independent in later life.<\/p>\n
Want to see what I\u2019m doing?<\/p>\n
Targeting a million<\/p>\n
To my mind, saving instead of investing is a major mistake that millions of Britons fall into.<\/p>\n
Okay, money put in the bank provides a guaranteed return, and the value of my investment will never fall. The same can\u2019t be said with assets that are traded on the stock market.<\/p>\n
Yet cash savings provide the sort of terrible returns that can leave retirees dangerously short of funds. This to my mind is a greater risk, given the strong long-term profits that share investing tends to provide.<\/p>\n
Someone who puts \u00a3500 a month into a Cash ISA<\/a>, for instance, would likely have just \u00a3216,879 in their nest egg after 30 years. For a Stocks and Shares ISA<\/a> investor, the amount would be above a million (\u00a31,047,026 to be exact). These numbers are based on Moneyfacts data since 2015.<\/p>\n The Magnificent 7<\/p>\n There are several ways to use retirement savings to make a second income. My plan is to invest in a diversified portfolio of dividend shares providing me with regular cash payouts.<\/p>\n Of course dividends are never guaranteed. But investing in shares spanning different sectors and regions can make one\u2019s income stream more consistent.<\/p>\n I think a strong, seven-stock portfolio could look something like this:<\/p>\n