Dividend Calculator
Project dividend income year by year from yield, dividend growth, price growth, reinvestment (DRIP) and contributions — with portfolio value and yield on cost.
Dividend Calculator: with the default inputs, annual dividend income in the final year is $1,398.
Annual dividends ÷ share price today. The S&P 500 yields ~1.3%; dividend-focused funds 3–4%.
How fast the payout per share rises. Dividend aristocrats have averaged 5–8%.
New money added at the end of each year.
- Portfolio value
- $41,866
- Total dividends received
- $14,294
- Total invested
- $10,000
- Yield on cost
- 13.98%Final-year dividends ÷ total invested.
Assumptions
- Dividends are paid once a year and, if reinvested, buy shares at that year's price before price growth is applied.
- Contributions arrive at the end of each year; dividend and price growth are constant.
- No taxes on dividends, and no dividend cuts.
| Year | Dividends | Cumulative | Portfolio value | Yield on cost |
|---|---|---|---|---|
| 1 | $300 | $300 | $10,712 | 3% |
| 2 | $324 | $624 | $11,478 | 3.24% |
| 3 | $351 | $975 | $12,302 | 3.51% |
| 4 | $380 | $1,355 | $13,189 | 3.8% |
| 5 | $411 | $1,766 | $14,144 | 4.11% |
| 6 | $445 | $2,211 | $15,173 | 4.45% |
| 7 | $482 | $2,694 | $16,281 | 4.82% |
| 8 | $522 | $3,216 | $17,476 | 5.22% |
| 9 | $566 | $3,782 | $18,763 | 5.66% |
| 10 | $614 | $4,395 | $20,152 | 6.14% |
How this is worked out
The formula
Each year t: Dividends_t = Value_(t−1) × Yield_(t−1) Value_t = (Value_(t−1) + Dividends_t if reinvested) × (1 + price growth) + contribution Yield_t = Yield_(t−1) × (1 + dividend growth) ÷ (1 + price growth) Yield on cost = final-year dividends ÷ total money invested
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Initial investment
- A number.in dollars · 0 or more · defaults to 10000
- Dividend yield
- Annual dividends ÷ share price today. The S&P 500 yields ~1.3%; dividend-focused funds 3–4%.a percentage · from 0 to 50 · defaults to 3
- Annual dividend growth
- How fast the payout per share rises. Dividend aristocrats have averaged 5–8%.a percentage · from -50 to 50 · defaults to 5
- Annual share price growth
- A number.a percentage · from -50 to 50 · defaults to 4
- Years
- A number.from 1 to 60 · whole numbers only · defaults to 20
- Reinvest dividends (DRIP)
- Turn this on or off.defaults to on
- Annual contribution
- New money added at the end of each year.in dollars · 0 or more · defaults to 0
What you get back
- Annual dividend income in the final yearmain answer
- Portfolio value
- Total dividends received
- Total invested
- Yield on cost
- Final-year dividends ÷ total invested.
What this assumes
- Dividends are paid once a year and, if reinvested, buy shares at that year's price before price growth is applied.
- Contributions arrive at the end of each year; dividend and price growth are constant.
- No taxes on dividends, and no dividend cuts.
About this calculator
Dividend investing has two engines. The obvious one is the yield — the cash the shares pay out each year. The quieter one is growth in the payout: a company raising its dividend 6% a year doubles your income every 12 years without you buying a single extra share. Reinvesting the dividends adds a third engine, because each payout buys shares that pay dividends of their own. This calculator runs all three and shows what the income stream looks like in year 10, 20 or 30.
How to use it
Enter your starting investment, the current yield, and your expectations for dividend growth and share-price growth. Leave DRIP on to reinvest; turn it off to model living on the income. Add an annual contribution if you'll keep buying. The dividend and price growth rates are separate on purpose: if payouts grow faster than prices, the yield rises over time; if prices outrun payouts, it falls. Historically the two move together over long periods, which is why 4–6% for both is a sensible default for a quality dividend fund.
Reading the results
- Annual dividend income in the final year is the headline — the passive income the portfolio throws off by then.
- Portfolio value is what the shares are worth; with DRIP it includes all the reinvested payouts.
- Total dividends received adds up every year's cash.
- Yield on cost is final-year income divided by the money you actually put in. Long-time holders of dividend growers routinely see yields on cost above 10% — the reason patient dividend investors are so attached to their positions.
Caveats
Dividends aren't guaranteed; companies cut them in recessions (about a quarter of S&P 500 payers cut or suspended in 2020), and a very high yield is usually a warning rather than an opportunity. In a taxable account, qualified dividends are taxed each year at 0/15/20% even when reinvested, which trims the compounding; inside an IRA or 401(k) they compound untaxed. Total return — dividends plus price change — is what ultimately matters for wealth, and a company that pays no dividend but grows faster can beat one that pays a lot. Use this tool to plan an income stream, not to pick between dividend and growth strategies.
Frequently asked questions
▸How much do I need invested to earn $1,000 a month in dividends?
$12,000 a year at a 4% yield needs $300,000; at 3% it needs $400,000. Use Solve for → initial investment with the DRIP off and one year to find your figure.
▸What is yield on cost?
Current annual dividends divided by what you originally paid for the shares. If you bought at a 3% yield and the dividend has since doubled, your yield on cost is 6%, even if the shares now yield 3% to a new buyer.
▸Should I reinvest dividends?
If you don't need the income, yes — reinvestment is where most of the long-run compounding comes from. Most brokers will do it automatically and commission-free through a DRIP.
▸Are dividends taxed?
In a taxable account, qualified dividends are taxed at long-term capital-gains rates (0%, 15% or 20%) in the year paid, reinvested or not; non-qualified dividends are taxed as ordinary income. In an IRA or 401(k) they aren't taxed until withdrawal (never, for a Roth).
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