Here's how much I would need to invest in the FTSE tracker to quit my job and live off the income

Perhaps the easiest way to make an income from stocks is to take a FTSE Shares Everything a clue.

That would give me exposure to all the share price growth and dividend yield from the 600 largest stocks on the London Stock Exchange.

UK shares offer the highest yields in the world. Today, the FTSE All-Share yields 3.58%. That's well above the 1.32% yield on S&P 500. New York may beat London in stock price growth but it can't match it in revenue and that's what I'm looking for here.

Phoenix Group Holdings can fly

Personally, I prefer to buy individual shares in the UK as this allows me to generate more dividend income.

The most productive sum in my self-invested pension – and the highest FTSE 100 – it's insurance Phoenix Group Holdings share price (LSE: PHNX). It now yields a blockbuster 9.31%.

A sky high yield can seem fragile. However, the Phoenix harvest looks sustainable. The board has increased shareholder payouts in seven of the past nine years. In the other two, it froze (and one of those years was an epidemic so it's understandable).

Dividends need to generate more income and on the score, Phoenix looks strong. Last year, it aimed for £1.8bn in revenue, and made £2bn.

It operates in a competitive market, where inflation has driven up the cost of claims. I don't expect Phoenix's stock price to be lights out, but it could grow as interest rates fall and savers get less money from cash and bonds.

All-Share Shares

Buying individual stocks is not for everyone. A cheap tracker like Vanguard FTSE UK All Share Index Unit Trust it spreads the risk while still providing a good second income. It has no upfront fees and a rock-bottom fee of 0.06% per year.

Let's say I've had enough of writing about stocks and I want to retire with them. A single pensioner needs £31,300 a year to have an 'average' income, according to the Pensions and Lifetime Savings Association.

I am now set to receive the new full State Pension, currently worth £11,502. That leaves me needing another £19,798. To generate that from the FTSE All-Share tracker, I would need to hold a total of £553,016 given today's yield of 3.58%.

That's a lot of money but it shows how much money we all need to fund a decent retirement. It is important to start early.

If I invested £250 a month and compounded that at 5% every year, after 30 years I would have £528,095. So I will be very close to my target. This assumes my portfolio is returning 7% per annum after fees on average, broadly in line with the long-term returns of the FTSE.

If I wanted to quit before retirement age, I would need more in my tracker. Investing is the best way I know of to generate a second income but as my statistics show, it won't happen overnight. That's why I buy individual stocks, to speed up the process. By doing so, I hope to exceed my income goal in style.