Dividend Income Calculator
Project dividend income, reinvestment growth, and yield on cost over time.
Your details
Assumptions
This calculator runs entirely on your device. Nothing you enter is uploaded, stored, or sold. How this works
Annual dividend income in 20 years
$82,724
$6,893.68 per month, before tax
Includes your inputs, the full breakdown, and every row of the table.
Portfolio value
$1,614,781
Yield on cost
16.88%
Income divided by what you actually paid
Cumulative dividends
$643,331
Forward yield
5.12%
| Year | Portfolio value | Dividend income |
|---|---|---|
| 0 | $250,000 | $8,750 |
| 1 | $279,438 | $9,968 |
| 2 | $311,088 | $11,311 |
| 3 | $345,146 | $12,791 |
| 4 | $381,824 | $14,422 |
| 5 | $421,355 | $16,221 |
| 6 | $463,997 | $18,206 |
| 7 | $510,032 | $20,397 |
| 8 | $559,771 | $22,817 |
| 9 | $613,557 | $25,490 |
What this means
- Reinvesting compounds both share count and income. In a taxable account the dividends are still taxed in the year received, which is why the after-tax amount is what gets reinvested here.
- Qualified dividends are taxed at long-term capital gains rates (0%, 15%, or 20%). REIT and most bond distributions are taxed as ordinary income instead.
How the dividend income calculation works
Dividend investing is often described in terms of current yield, but the number that matters over a long holding period is yield on cost — this year's income divided by what you originally paid. A stock bought at a 3% yield that raises its dividend 7% a year is paying nearly 12% on your original cost after twenty years.
Total return still governs. A high headline yield can signal a distressed business rather than a generous one, and a dividend cut usually arrives alongside a price collapse. Dividend growth combined with a payout ratio the company can sustain is a better filter than yield alone.
Frequently asked questions
What is a DRIP?
A dividend reinvestment plan automatically buys additional shares with each dividend payment, often commission-free and in fractional shares. It is the simplest way to compound without doing anything.
Are dividends taxed even if I reinvest them?
Yes, in a taxable account. Reinvestment does not defer the tax — you owe it in the year the dividend is paid, and your cost basis increases by the reinvested amount.
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Disclaimer. This calculator is provided for general information and educational purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Results are estimates based on the inputs you provide and the assumptions described above. Confirm any figure with a qualified professional before acting on it.