These days it can be difficult to find the money to invest for retirement. As inflation continues to squeeze budgets, it can be tempting to cut back on long-term savings plans. Short-term needs can seem far more compelling.

I get it, we’ve all been there at times, and for me it was especially true when I’d only just started working.

At the same time though, I also had plans to quit the rat race early to be able to travel more. With the average retirement age in the UK being just under 65 years old, I knew I’d have to start investing early to beat that.

Having now retired early in my 40s, these are the two top tips on investing for retirement that really helped make it happen.

Reinvesting dividends for a better retirement

It can be eye-opening to see the impact of reinvesting dividends on market returns. Especially as time goes on and those reinvested dividends start to earn their own returns — the so-called snowball compounding effect.

For example, the FTSE 100 average return is usually quoted as around 7.9%. What people often don’t mention is that includes reinvesting dividends. Without doing that, the average rate drops to around 5.8%.

The difference may sound small, but if I had invested a lump sum of £10,000 back in 1984, the impact today would look like this:

After 10 years, the gap is small at just under £4k. But by the start of 2022, it’s a far more substantial amount at around £95k extra. That’s pretty much twice the final pot size between the two different methods of investing!

That difference comes from the FTSE 100 average dividend level of around 3.5% over the same time period. So imagine how that gap widens when I target dividend shares above that rate.

That could be Rio Tinto, M&G and Persimmon — if invested equally between them, I’d get an average blended dividend rate of around 11.5%. That’s only going to widen that gap with this reinvestment approach.

That’s great — but where I saved my cash mattered too. Time for tip two!

Planning matters when investing for retirement

When it comes to investing for retirement, planning ahead matters.

I’ve always invested in pension schemes first for the tax rebates they offered. But it’s my ISA investments that offer me far more flexibility.

By using a Stocks and Shares ISA, I can invest up to £20k each year free of any capital gains. And now, I’m also able to withdraw a regular tax-free income to fund my early retirement.

If I’d bought those three shares mentioned above, then after just 10 years of maxing out my ISA I’d have about £350k in total, ignoring any capital growth. That would give me a healthy annual tax-free income of almost £40k!

Picking the right investments for retirement

I honestly couldn’t have retired early without using these two tips for investing for retirement. But it’s worth saying that (unsurprisingly) it’s as important to pick the right underlying investments.

Dividend yields are prone to change and inflation needs accounting for — especially these days. But taking the time to research what’s best for my personal risk/reward appetite really paid off.

It’s not always been easy, but these two tips were definitely a big part of helping me achieve my dream retirement.

The post 2 top ways to invest for retirement appeared first on The Twelfth Magpie.

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• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Michelle Freeman owns shares in Rio Tinto. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The good news is, it’s not impossible to build a sizeable pension pot in the years you have left before retirement, although it will require quite a bit of effort and you may have to work a little bit longer than expected.

So, if you fall into this bracket, here are my three tips to help you make the most of your money.

Open a SIPP

My first tip is to open a SIPP. Any money you contribute to a SIPP is entitled to tax relief up to your marginal tax rate. Anyone under the age of 75 can pay into a SIPP and even if you are not earning, you can contribute up to £2,880 net each tax year and still receive tax relief.

If you’ve nothing saved by age 60 and you want to retire more comfortably, making the most of this tax benefit while you can is vital.

Save, save, save

My next tip is to start saving as much as possible, as soon as possible. Time is the greatest advantage investors, and savers have. And the sooner you start saving, the better because it allows your money to start earning money and the benefits of compound interest to work their magic. The longer you put off saving, the harder it will become.

Invest for the future

My final tip is to invest for the future. You are going to need all the help you can get if you want to build a sizeable retirement pot from a standing start at age 60.

By investing in the stock market, you can boost your returns, but it is not advisable to invest with anything less than a 10-year time horizon. So, if you want to squeeze as much money as possible out of the stock market, you might have to delay your retirement date.

If you can, it is certainly worth doing this. Over the past decade, the FTSE 250 has produced an average annual return for investors in the region of 9%. The FTSE 100 has returned an average of 7% per annum over the same time frame.

Assuming an annual growth rate of 9%, I calculate it would take contributions of £2,000 a month (or £2,500 including tax relief) to build a pension pot worth nearly half a million pounds over the space of 10 years. This is enough to produce an annual income of £20,000 or approximately £28,550 including the State Pension.

At a rate of 7%, you could build a similar sort of retirement pot with contributions of £2,700 a month.

If you are willing to take on a bit more risk, it is possible to build a much larger savings cushion, although I should caution that this is not guaranteed. 

Some active small-cap investment funds have returned low-teens annual gains during the past few years. If you can achieve a rate of return of 12%, for example, that would be enough to turn monthly contributions of £2,500 into a pension pot worth nearly £600,000, enough to give you an annual income of £24,000 excluding the State Pension in retirement.

The post No pension savings at 60? I think you can still retire wealthy with these tips appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Indeed, it’s estimated that in the first six months of this year alone, a total of £207.5m was stolen from almost 60,000 people via financial fraud, including pension scams.

The good news is, saving for retirement isn’t as challenging as it first appears. The first step for preparing for the future is to set out a road map of how much you will need to save to hit your retirement target.

Creating a roadmap

The roadmap should start with the level of income desired in retirement. Here, I’m going to target £10,000 which, when added to the State Pension, will give an annual income of around £19,000. According to a survey from Which? magazine, this is slightly above the level of income most retirees believe they will need to cover all essential costs in retirement.

To generate this level of income, a pension pot of £250,000 will be required at the time of retirement, based on my calculations. 

The best way to hit the £250,000 target is to invest your money. If you do, you can get a return of up to 9% per annum on your money, 7.54% above the highest cash savings rate on the market today, although this isn’t guaranteed and will vary depending on the strategy used to invest.

For example, over the past decade, an FTSE 250 tracker fund has returned around 9% per annum. A FTSE 100 tracker fund, on the other hand, has produced a total return of about 7% per annum.

Assuming a retirement age of 65, my figures show a saver would need to put away £220 a month to be able to retire with a pension pot worth £250,000 if they started at 40 years of age. This is assuming the money is invested in the FTSE 250 and achieves an annual growth rate of 9%.

To hit the target in just 15 years, from a starting age of 50 and with a retirement target of 65, I calculate a saver would need to put away £650 a month. That’s again assuming a 9% annual return.

And finally, to hit the £250,000 benchmark from age 60, i.e. giving just five years of saving, it would take £3,500 a month, assuming that 9% annual return.

Conclusion

So, that’s how much you need to save for retirement by 40, 50 and 60. As the numbers above show, one of the greatest tools investors have when saving for the future is time.

The sooner you start saving, the better, as this allows the power of compound interest to work its magic. Investing is also essential if you want to make this target as you won’t be able to get the same kind returns with cash in today’s environment.

The post Here’s how much you need to save for retirement by 40, 50 and 60 appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Start saving 

Of course, if your goal is to amass a £1m portfolio for retirement starting at 40, you will have to save a fair amount of money each month. For example, assuming you can generate an average return of 8% per year on your money (more on this below), you’d need to save a little under £14,000 per year, or £1,167 per month, to hit the magical £1m mark by age 65.

Many people may struggle to save this much money every month. However, before you give up, be aware that there are clever financial strategies that could help you save this kind of money more easily. 

Savings boost

For example, if you saved into a Self-Invested Personal Pension (SIPP), the government would top up your contributions as a reward for saving for retirement. Basic-rate taxpayers receive ‘tax relief’ of 20% when they contribute to a SIPP, while higher-rate taxpayers can claim an additional 20% tax relief. What this means is that if you’re a basic-rate taxpayer, you’d only have to contribute around £934 yourself per month to save £1,167, while if you’re a higher-rate taxpayer, a £1,167 contribution would only cost you around £700 per month. All of a sudden, that million in retirement is looking more achievable.

Get your money working for you

Now, as I said earlier, my calculations are based on the assumption that you can generate a return of 8% per year on your money. So, how do you achieve this?

Well, one thing is for sure and that is you won’t get that kind of return if your money is sitting in cash savings in a SIPP or any other type of account. You’ll be lucky to receive a return of 1% per year. However, if you were to invest your money in a diversified mix of growth assets such as shares and investment funds, an average 8% annual return over the long run is certainly achievable.

For example, one of my favourite investment funds, Fundsmith, has generated an average annual return of around 21% over the last five years. Another fund that I have invested my pension money in, Lindsell Train Global Equity fund, has delivered annualised returns of around 22% over the last five years. Now, past performance is no guarantee of future performance, of course. However, the takeaway is that these kinds of growth assets can really get your money working hard for you.

Save regularly and boost your wealth by investing in growth assets, and a one million pound retirement portfolio is certainly achievable, even if you’re starting at 40. 

The post No savings at 40? You could still retire a millionaire appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Edward Sheldon has positions in the Fundsmith Equity fund and the Lindsell Train Global Equity fund. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Furthermore, changes to ISAs in recent years means that they’re potentially more appealing compared to online sharedealing accounts. Increased allowances and the emergence of products such as Lifetime ISAs, for example, could lead to higher returns in the long run. As such, while it’s still not easy to make a million, there may be a better chance of doing so today than there has been in the past.

Appealing investments

While the stock market has experienced a bull run in the last decade, the FTSE 100 and FTSE 250 appear to offer wide margins of safety at present. A number of their members have delivered disappointing share price performances in recent months as a result of political and economic challenges that have caused investor sentiment to decline.

With risks such as Brexit and a global trade war being somewhat persistent, there could be a range of opportunities for investors to capitalise on low valuations for a range of stocks in both indexes. Through buying while both appear to offer good value for money, an investor may be able to improve their risk/reward ratio and increase their chances of generating high returns in the long run.

ISA changes

The increase in the annual ISA allowance to £20,000 over recent years could make it easier for investors to generate a seven-figure portfolio in the long run. Although many investors may not be able to commit the full £20,000 per year, the fact that the allowance is almost three times as much as it was a decade ago means many people may be able to commit a larger amount than they would previously to their ISA each year.

In addition, the introduction of new products such as the Lifetime ISA could provide a boost to your long-term financial prospects. It offers an annual bonus of 25% of all contributions. Since up to £4,000 can be paid into a Lifetime ISA each year, this could amount to an annual bonus of up to £1,000. As such, it could be a worthwhile product for anyone under the age of 40 to open.

Making a million

With the FTSE 350 appearing to offer good value for money at present, as well as growth potential, there are a wide range of investment opportunities available to improve your chances of making a million. Although achieving that goal may not be easy, changes to ISAs in recent years could make the task more realistic for a larger number of people. As such, now could be the right time to start investing in shares through an ISA.

The post Retirement savings: why I think it’s never been easier to become an ISA millionaire appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

This, though, may present investors with an opportunity to buy high-quality companies at discounts to their intrinsic values. As such, now could be a good time to buy a range of FTSE 250 dividend stocks that may offer strong growth credentials over the long run. Doing so could improve your chances of becoming an ISA millionaire.

Uncertain outlook

Although the UK economy may experience a challenging period due to Brexit, that scenario is not guaranteed. As ever, it’s impossible to accurately predict the economic outlook, as it’s highly dependent upon a variety of decisions by lawmakers that have yet to be made.

While this uncertainty may cause investors to naturally become increasingly cautious, history shows it’s during such periods when the most opportune moments to purchase shares become available. In other words, buying when other investors are fearful, and when valuations are low, can lead to higher returns in the long run.

Certainly, there may be paper losses in the near term depending on how the economy performs. But with the UK economy having recovered from every recession and political difficulty faced in the past, buying during market corrections and bear markets has historically proven to be a sound strategy.

Valuations

Since a large number of the FTSE 250’s members offer dividend yields in excess of 4%, and even 5%, it may be possible for an investor to build a diverse portfolio of companies that offer an income return significantly in excess of inflation.

Furthermore, with the FTSE 250 historically offering stronger growth rates than the FTSE 100, mid-cap income shares may be able to produce higher dividend growth rates over the long run. This may not only boost an investor’s income, but could also lead to higher demand for a particular stock among a wider pool of investors. After all, a company that’s able to deliver a rapid rate of dividend growth could signify financial strength and management optimism in its future prospects. In turn, this may increase interest among growth and income investors alike, thereby catalysing its share price.

Takeaway

By investing in mid-cap shares that offer wide margins of safety, relatively high yields, and dividend growth potential, it may be possible to generate strong returns in the long run. While uncertainty may persist for some time, over a longer term buying during periods of economic and political turbulence could improve your chances of making a million.

The post Why I think FTSE 250 dividend stocks could make you an ISA millionaire appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Peter Stephens has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Furthermore, an expected increase in life expectancy could mean that State Pension age continues to rise over the long run as a result of affordability issues for the working population.

This, though, doesn’t necessarily mean retiring early is becoming impossible. Building a nest egg that provides a generous income in older age is still a very realistic aim for many.

With that in mind, here are three steps I’d take today to achieve the goal of retiring early and, in doing so, beating the rising State Pension age.

International growth

While there are a number of appealing investing opportunities in the UK at present, investing in the world’s fastest-growing economies could prove to be a shrewd move.

Emerging markets may be a relatively common theme among investors, having been a popular means of generating growth in the past. However, this doesn’t mean it’s now ‘yesterday’s news’, since the rise of the consumer in major economies such as India and China could provide significant growth opportunities across a wide range of sectors.

Accessing those sectors and companies is relatively straightforward for UK-based investors. This can be achieved through buying shares in stocks that operate mostly in emerging markets, or even through buying tracker funds that aim to mimic the returns on local indices. Investment trusts that focus on emerging markets could be another means of accessing the growth potential of the world’s fastest-growing economies.

Technological change

Technological change is likely to remain a key component of future economic growth. Therefore, seeking to capitalise on it as an investor could be a sound move.

At present, artificial intelligence seems to be a likely growth area over the long run. It has the potential to improve efficiency across a wide variety of businesses, while changing experiences for consumers in a number of different industries.

Although there are relatively few technology companies listed in the FTSE 350, in the US there are a wide range of large businesses focused on AI and other fast-growing areas. As such, investing in them today, either directly or through a fund, could produce high returns in the long run.

Diversify

Clearly, it’s impossible to know exactly how the world economy will perform in future. Therefore, anyone looking to build a nest egg for retirement should have a high degree of diversification within their portfolio.

Although diversification may seem to dilute returns during bull markets in the eyes of some investors, they may be glad they aren’t overly reliant on a small number of stocks or industries during recessions and bear markets. Then it may keep their portfolio afloat and provide them with the opportunity to retire early on a generous passive income.

The post Retirement saving: 3 smart money moves I’d make today to beat the rising State Pension age appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, since 35% of people do not currently have another pension plan in place, living off the State Pension in retirement may become an increasingly likely prospect.

This, though, does not need to be the reality for anyone. Whether you have decades until retirement, or it is just around the corner, investing in dividend stocks could provide a worthwhile second income to supplement the State Pension in older age.

Dividend focus

Although dividend stocks may have a reputation for being slow-growing and defensive companies, this is not always the case. There are a number of FTSE 350 stocks that offer yields which are significantly higher than inflation, and yet are forecast to post strong earnings growth over the long run.

In fact, a company’s ability to grow its dividends could have a major impact on its share price performance. Not only could a rising dividend attract income investors, the stock market may upgrade companies that have the confidence to increase shareholder payouts. It may signal that their management is upbeat about their future prospects, and that their financial outlook is improving.

Furthermore, with various studies having shown that the reinvestment of dividends received can have a significant impact upon a portfolio’s total returns in the long run, focusing on good value dividend stocks with growth potential could be a means of generating a nest egg by retirement.

Income potential

Even if a retiree has a nest egg that they feel may not be as large as they had hoped for, the FTSE 100 currently offers a wide range of stocks with high yields. The index itself has a dividend yield of around 4.2%, which is higher than its long-term average. Therefore, it may be possible to generate a surprisingly high income from even a modest nest egg.

Furthermore, there are many FTSE 100 stocks that offer yields in excess of that of the index. Therefore, a retiree may even be able to build a diverse portfolio of shares that have an average yield of over 5%. If this is achieved, they would require a nest egg of around £175,000 in order to double their State Pension.

Relative appeal

While investing in shares carries risks, the potential returns are much higher than those available in Cash ISAs or in buying investment-grade bonds. While buy-to-let investing has been a popular source of income in older age, tax changes have made it less profitable for many landlords.

Therefore, dividend stocks could offer a worthwhile balance between risk and reward, as well as between growth and income. With the FTSE 100 appearing to offer good value for money, now could be a good time to buy a range of large-cap income stocks.

The post Retirement savings: why I think you can beat the State Pension with dividend stocks appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Unfortunately, this is probably the worst thing you can do. Saving for retirement isn’t glamorous or sexy, but it is essential, and the sooner you start saving, the better.

So, with this in mind, I’m going to cover my stress-free strategy for boosting your retirement savings, an approach I believe will put you firmly on the course to achieving a comfortable retirement without taking up too much of your valuable time.

Starting at the beginning

The most stress-free way to start saving without having to get out a spreadsheet to work out a budget is to set up a direct debit to come out of your account at the beginning of every month.

I’ve borrowed this advice from The Oracle of Omaha, Warren Buffett, who believes savers should not “save what is left after spending,” but should instead “spend what’s left after saving.” This strategy is a simple and straightforward way to make sure you are saving enough every month without having to worry about how much you are spending.

When you’ve got this savings plan sorted, the next step is to find a suitable investment for your money. Investing is the best way to get your money to grow over time. If you’re not willing to take this risk, then you’re putting yourself at a significant disadvantage. Today, there are thousands of options for investors to choose from when it comes to picking investments and funds.

I recommend savers take advantage of the boom in low-cost tracking products and buy a low-cost FTSE 250 tracker fund in their pension fund. Most investment platforms offer a regular investment option for customers to take advantage of, and I highly recommend using this as part of that stress-free process.

You can set up a monthly investment of say, £200 a month, that will be deducted from your account and invested without any further input on your part. That’s the core of my anxiety-free strategy, to set and forget a regular direct debit and investment plan.

The benefits of compound interest

When you have a saving plan in place, your money will take care of itself. This is the benefit of compound interest, which is essentially the process of your money making money. 

Compound interest does all the heavy lifting of saving, so you don’t have to. For example, let’s say the FTSE 250 produces an average annual return for investors of 10% per annum for the next 20 years (in line with its historical average). At this rate of return, just £200 a month (or £2,400 a year) would grow to be worth £149,000, that’s £48,000 of total deposits and £101,000 of total interest (which is a blend of capital and income growth in this case). 

So, that’s my stress-free strategy for boosting your retirement savings. The numbers (contributions and returns) above are just a rough guide and will vary from saver to saver, but the structure will remain the same for everyone. 

The post My stress-free strategy for boosting your retirement savings appeared first on The Twelfth Magpie.

More reading

• How much is needed in an ISA to unlock £1,220 of passive income a year?
• Forget meal deals! Here’s how £8 a day could be worth £357,000
• With a 7% yield, is this dividend share a no-brainer?
• The CMC Markets share price is smashing the FTSE 100 in 2026. Is there an opportunity here?
• With a yield of 6.8% and a P/E ratio of 12.1, is this a dirt cheap FTSE 250 stock to consider?

Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Although their prices may not be as attractive as they were at the start of the year as a result of the index’s recent rise, they could still offer the opportunity to generate impressive returns. In fact, over the long run they could help an investor to build a seven-figure ISA portfolio.

Unilever

One FTSE 100 growth stock that seems to have a bright long-term future is Unilever (LSE: ULVR). The company has a long track record of impressive growth, with its decision to invest heavily in emerging markets now seeming to be paying off.

Since wages in emerging economies such as India and China are forecast to rise, the stock may enjoy favourable operating conditions for many years. Due to its diverse geographical spread, it is also not reliant on a specific market for its growth. Likewise, a diverse spread of products means that its risks versus other consumer goods companies may be relatively low.

In the current year, Unilever is forecast to deliver a rise in net profit of over 9%. Although it trades on a price-to-earnings (P/E) ratio of 20, its rating has been higher in previous years. Therefore, should investor sentiment across the FTSE 100 continue to improve, the stock could realistically make gains from an upward re-rating, as well as from the impact of a rising bottom line.

Whitbread

Following the sale of its Costa division, Whitbread (LSE: WTB) is now focused on expanding its Premier Inn hotel chain. There seems to be significant potential to do so in the UK and in a variety of international markets, with greater focus on its hotels business potentially providing greater efficiency for the firm.

Although the UK economic outlook may be challenging at the present time, Whitbread generally performed well in the financial crisis. A number of consumers and business customers traded down to budget hotels, which could mean that it benefits on a relative basis from the uncertain outlook for UK consumer spending.

Since Whitbread trades on a P/E ratio of 17, it is not a cheap share to buy right now. However, with it expected to deliver improving financial performance over the long run and it having a solid track record of growth, it could be worthy of a premium versus its FTSE 100 index peers. In fact, it has recorded positive earnings growth in each of the last five years, which suggests that its risk/reward ratio could be appealing over the long run.

Alongside Unilever, Whitbread could deliver an impressive level of capital growth. I think both stocks could even help an investor become an ISA millionaire over the long run.

The post Retirement savings: I think these 2 FTSE 100 shares can help make you an ISA millionaire appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Unilever and Whitbread. The Motley Fool UK owns shares of and has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.