Building a second retirement income is the highest priority for many investors and rightly so. Personal pension (SIPP) is one of the most effective tools for this.

SIPPS enjoy a tax relief from retirement contributions, as well as decades of tax growth in the package. What’s more, in retirement, 25% of the pot can be withdrawn without tax, and the rest can be used to generate regular income (which Is taxable). How gigantic should the pot be to aim at an income of 1250 pounds per month?

Get this pension

It works at 15,000 pounds a year, which is a decent contribution to the costs of maintenance in later life. A common rule is to withdraw no more than 4% per year to reduce the risk of limiting money. On this basis, a pension pot of £ 375,000 is required to achieve my goal.

This is a massive number, but it is possible to achieve for those who start early, invest constantly and reinvest dividends. Someone bringing 400 pounds a month to a globally diverse capital portfolio and generating an annual growth by 8% can build a pool of this size in about 25 years. Adding a basic tax credit consumes 400 GBP to just 500 GBP, which would raise to 473 726 GBP. Of course, none of these numbers is guaranteed in any way.

This is mathematics. But achieving the goal also depends on choosing the right mixture of stocks. One FTSE 100 Share, I pay more attention Record (LSE: RKT).

Rekitt’s reflection

The giant of consumer goods was seen as a solid supply for years, until suddenly it was not. This translates into the American company Formula Mead Johnson in 2017, and then as a result stood in the face of many lawsuits. He was also hit by problems with accounting, and even tornado disturbing production.

Now Reckitt is crawling with the wreck. Shares increased by 33% within 12 months, increased by improving sales and stronger profits. On July 24, he improved his full annual goal of increasing revenues to 4% after a better expected Q2. Sales increased by 1.9%, and operating profit in the first half increased by 1.8% to 1.7 billion GBP.

Reckitt also rewards shareholders from the purchase of shares worth 1 billion pounds. Performance is a solid 3.66%today.

Shares trade in price to a profit of 15.85, which looks reasonable, taking into account its global energy of the brand and reliable cash flows. CEO Kris Licht improves activities, sells margins such as Air Wick and Calgon, sells margins.

Risks remain. Court disputes around products from the formula for infants have not ended, and consumer expenditure may remain indigent. But Reckitt now looks more concentrated and I see the value in his return. I think it is worth considering today, with a long -term view.

Spread

Even stable supplies can sway, as the history of Reckitt shows. Therefore, I prefer to have a varied spread of about 15 quality FTSE 100 Actions, mixing solid dividend payers with companies focused on growth.

SIPP worth 375,000 pounds will not be built overnight. This requires patience, regular investment and discipline. But over time I think that it is possible to create a wallet capable of providing an annual passive income of 15,000 GBP. Or maybe much more.