💸 Dividend Calculator
Calculate dividend income, DRIP growth, and passive income goals. Dividend growth model with tax comparison.
Investment
Initial Yield
4%
Growth & DRIP
Retirement Goal
Capital Needed
$600,000
Annual Dividend Income
$1,815.48
$151.29/mo
DRIP Impact
Tax Comparison
Dividend Growth Projection
How Dividend Calculator Works
Core Formula
Annual Dividend = Shares × DPS × Frequency With DRIP: New Shares = Dividend ÷ Stock Price (× 1+Discount%) Yield on Cost = Annual Dividend ÷ Cost Basis
📊 Example
• 500 shares, $2 annual dividend, 7% growth, 10 years with DRIP:
• Annual income grows from $1,000 to ~$1,970 · Extra 85 shares from DRIP · Yield on cost rises from 4% to 7.9%
• To earn $2,000/month passive income at 4% yield: need $600,000 invested
❓ FAQ
What is dividend yield and how is it calculated?＋
Dividend yield = Annual Dividend Per Share ÷ Stock Price × 100%. A $100 stock paying $4/year has a 4% yield. Yield on cost uses your purchase price instead of current price.
What is DRIP and how does it work?＋
DRIP (Dividend Reinvestment Plan) automatically uses dividends to buy more shares. Over time, you accumulate more shares that generate more dividends - compound growth at work.
How much do I need invested to live off dividends?＋
Divide your desired annual income by your expected yield. For $50,000/year at 4% yield, you need $1,250,000 invested. Use our calculator to model your specific scenario.
What is the difference between qualified and ordinary dividends?＋
Qualified dividends are taxed at capital gains rates (0-20%). Ordinary dividends are taxed as regular income (10-37%). Most US stock dividends are qualified if held >60 days.
What is a good dividend payout ratio?＋
40-60% is generally sustainable. Below 40% means room to grow. Above 80% may be at risk of being cut. Check the company's free cash flow to verify.
What are Dividend Aristocrats?＋
S&P 500 companies that have increased dividends for 25+ consecutive years. Examples: Coca-Cola (60+ years), Johnson & Johnson, Procter & Gamble. They demonstrate reliable income growth.
Does DRIP really make a big difference?＋
Yes. Over 20 years, DRIP can add 40-80% more total return compared to taking dividends as cash. The longer the timeframe, the bigger the difference.
How are monthly dividends different from quarterly?＋
Monthly dividends compound faster because you reinvest more frequently. Companies like Realty Income (O) pay monthly. Most US companies pay quarterly dividends.