Dividend Income Calculator
Project how much passive income your portfolio could pay you. The calculator accounts for reinvested dividends, dividend growth and new monthly contributions.
Show year-by-year breakdown
How the dividend calculator works
Each year, the calculator:
- adds your monthly contributions,
- pays dividends at the current yield on cost, which grows by your dividend growth rate,
- reinvests those dividends after tax if DRIP is on,
- grows the share price by the price growth rate.
Total return is roughly the dividend yield plus price growth. A 3.5% yield with 4% price growth is about 7.5% a year.
Yield vs. dividend growth
High-yield stocks (6%+) pay more today but often grow their payouts slowly. Dividend-growth stocks might yield 2% but raise the payout 8–10% a year. Over 15–20 years, the growers' yield on cost often catches up and passes the high-yielders. Try both in the calculator to see where they cross.
Rule of thumb: portfolio needed for a monthly income
Portfolio needed = (Monthly income × 12) ÷ Dividend yield
At a 4% yield, $1,000 a month takes $300,000 invested. See exact tables for $500, $1,000, $2,000 and $5,000 a month.
Common questions
What is a good dividend yield?
For a diversified portfolio, 2–4% is typical. Broad dividend ETFs usually yield 3–4%. Yields above 7–8% can mean the market expects a dividend cut, so check the payout ratio and cash flow before buying.
What does DRIP mean?
DRIP stands for Dividend Reinvestment Plan. Your dividends automatically buy more shares, which then pay their own dividends. That is compounding applied to income.
Are dividends taxed?
In the US, qualified dividends are taxed at 0%, 15% or 20% depending on your income. Ordinary (non-qualified) dividends are taxed as regular income. Dividends inside an IRA or 401(k) are not taxed each year. Enter your expected rate in the tax field.
How accurate is this projection?
It assumes constant yield, dividend growth and price growth, which real markets never deliver. Treat the result as one scenario and test cautious inputs too.