Dividend Calculator with DRIP
Put in what you invest each month, with dividends reinvested or taken as cash, and see what it pays you later: the after-tax dividend income per month at the end of your horizon, the year you clear your target, and what that target would cost to buy outright today.
All three numbers below are assumptions you can edit. They are not the current yield or past performance of any particular ETF or stock.
Qualified dividends are taxed at long-term capital gains rates, and 15% is the middle bracket most filers land in (IRS Topic no. 404).
Ordinary (non-qualified) dividends — most REIT and bond-fund distributions — are taxed at your ordinary income rate instead. Enter that rate manually if that is what you hold.
At this yield and tax rate, collecting $1,000 a month starting today would take $403K invested.
Reinvesting versus spending the dividends
The same inputs with reinvestment switched off. The cash column assumes the dividends just pile up, earning nothing.
Reinvesting ends up $75,299 ahead
Year by year
The year your after-tax monthly dividend clears the target is marked.
| Year | Contributed | Value | Dividends/yr (net) | Per month (net) | Yield on cost |
|---|---|---|---|---|---|
| Year 1 | $16,000 | $17,054 | $411 | $34 | 3.02% |
| Year 2 | $22,000 | $24,695 | $641 | $53 | 3.43% |
| Year 3 | $28,000 | $32,985 | $903 | $75 | 3.79% |
| Year 4 | $34,000 | $41,993 | $1,201 | $100 | 4.15% |
| Year 5 | $40,000 | $51,795 | $1,539 | $128 | 4.53% |
| Year 6 | $46,000 | $62,479 | $1,923 | $160 | 4.92% |
| Year 7 | $52,000 | $74,142 | $2,360 | $197 | 5.34% |
| Year 8 | $58,000 | $86,894 | $2,857 | $238 | 5.79% |
| Year 9 | $64,000 | $101K | $3,421 | $285 | 6.29% |
| Year 10 | $70,000 | $116K | $4,063 | $339 | 6.83% |
| Year 11 | $76,000 | $133K | $4,794 | $400 | 7.42% |
| Year 12 | $82,000 | $152K | $5,626 | $469 | 8.07% |
| Year 13 | $88,000 | $172K | $6,573 | $548 | 8.79% |
| Year 14 | $94,000 | $194K | $7,653 | $638 | 9.58% |
| Year 15 | $100K | $219K | $8,886 | $740 | 10.45% |
| Year 16 | $106K | $247K | $10,294 | $858 | 11.42% |
| Year 17 | $112K | $278K | $11,903 | $992 | 12.50% |
| Year 18 | $118K | $312K | $13,745 | $1,145 | 13.70% |
| Year 19 | $124K | $349K | $15,855 | $1,321 | 15.04% |
| Year 20 | $130K | $392K | $18,277 | $1,523 | 16.54% |
The year's pre-tax dividend divided by everything you put in. It keeps climbing even when the share price does. This is arithmetic on the assumptions you type in, not a forecast, and it is not investment or tax advice. Dividends can be cut at any time and share prices can fall.
Why the yield number alone does not settle it
A 7% yield pays twice as much today as a 3.5% one. But a dividend growing 8% a year against one growing 2% a year crosses over somewhere, and past that point the lower-yielding position is paying more — in dollars, not just in percentage terms. That crossover is what yield on cost tracks, and it is why the right answer depends almost entirely on when you need the income.
If you need cash flow now, current yield wins and growth rates are close to irrelevant. If you are twenty years out, the growth rate does most of the work. Switch between the high yield and dividend growth presets above and change the horizon from 5 years to 30 — the ranking flips in front of you.
Every rate on this page is an assumption you entered, not a forecast and not the record of any particular fund. Dividends get cut and share prices fall; neither is modeled here.
What each income target costs to buy today
The balance that throws off this much per month after a 15% dividend tax, with no further contributions and no growth. It is the finish line the calculator above is walking you toward.
| Target per month (net) | 2% yield | 3.5% yield | 5% yield | 7% yield |
|---|---|---|---|---|
| $500 | $353K | $202K | $141K | $101K |
| $1,000 | $706K | $403K | $282K | $202K |
| $2,000 | $1.41M | $807K | $565K | $403K |
| $3,000 | $2.12M | $1.21M | $847K | $605K |
| $5,000 | $3.53M | $2.02M | $1.41M | $1.01M |
The account matters as much as the holding
The same fund pays a different amount into your pocket depending on where you hold it. In a taxable brokerage account, qualified dividends lose 15% for most filers. In a Roth IRA or Roth 401(k) they lose nothing, ever — set the tax rate to 0% above and run the same twenty years to see what that compounds into. A traditional IRA or 401(k) defers the tax instead: nothing is withheld along the way, and withdrawals are taxed as ordinary income later.
Over a long horizon this stops being a question of a few percentage points and becomes a question of compounding, because the money that would have gone to tax stays invested and earns its own dividends. That is the single largest lever on this page that does not require picking a better fund.
FAQ
How much do I need invested to get $1,000 a month in dividends?
You need $12,000 a year after tax. At a 3.5% yield taxed at 15%, that takes about $403K invested. At a 7% yield it drops to roughly $202K. The catch is that the higher-yielding option usually grows its dividend more slowly and carries more risk of a cut, so a smaller required balance is not automatically the better deal. Change the target and the yield in the table above to see how the two trade off.
How do I calculate dividend income from a stock or ETF?
Multiply the balance you hold by the annual yield to get the pre-tax dividend for the year, then take off your dividend tax rate to get what actually reaches you. Divide by twelve for a monthly figure, or by four if you want the quarterly payout most US funds pay on. The calculator above does that every year in turn, so a rising dividend and a growing balance both compound instead of staying flat.
What returns does this calculator assume?
Nothing. You supply them. The yield, dividend growth rate, and price growth rate are all inputs, and the three preset buttons are labeled assumption sets, not funds. This tool does not know the current yield or past performance of any particular ETF or stock, and it deliberately does not quote one. Look up the fund's actual distribution history on the issuer's site and type that number in.
How are dividends taxed?
Qualified dividends are taxed at long-term capital gains rates of 0%, 15%, or 20% depending on your taxable income (IRS Topic no. 404). Most filers land at 15%, which is why it is the default here. Ordinary dividends, including most REIT distributions and bond-fund income, are taxed at your regular income rate instead, so enter that rate manually if that is what you hold. High earners may also owe a 3.8% net investment income tax on top.
Does DRIP make that much difference?
On the numbers above, meaning $10,000 to start, $500 a month, 20 years and the dividend-growth assumption set, reinvesting ends up about $75,299 ahead of collecting the dividends as cash. The gap widens the longer the horizon runs, because reinvested dividends buy shares that pay their own dividends. It also depends on share prices rising; reinvesting into a falling asset is not free money. And once you actually need the income, taking the cash is the entire point.
What is yield on cost, and why does it keep rising?
Yield on cost is the year's pre-tax dividend divided by everything you have contributed, rather than by today's share price. Current yield falls when a share price rises, which makes a good year look like a worse investment. Yield on cost ignores the price entirely, so as long as the company keeps raising its dividend, the number keeps climbing. It tells you what your own money is earning, not what a new buyer would get.
Sources
Qualified dividends are taxed at the 0%, 15% or 20% long-term capital gains rates; ordinary dividends are taxed as ordinary income. Yield, dividend growth and price growth are assumptions entered by the user, not projections.
Last verified: 2026-09-02 · We monitor official sources daily and update rates after human review of the originals.
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