Dividend Calculator
DRIP, Dividend Income and 2026 Tax
Project how your dividend portfolio and income grow with reinvestment (DRIP), see the tax on your dividends, and find out how much you need invested for the monthly income you want.
Read the full answer — method, rates and figures
Quick answer: A dividend calculator projects how a dividend portfolio grows when payouts are reinvested (DRIP). For example, $10,000 plus $500 a month in a stock yielding 3.5%, with dividends growing 6% and the price 4% a year, reinvested for 20 years, grows to about $356,211 and pays about $16,595 a year in dividends by year 20 ($1,383 a month).
To live on $1,000 a month of dividends at a 4% yield you need about $300,000 invested. In a taxable account, qualified dividends are taxed at 0%, 15% or 20% like long-term capital gains, plus the 3.8% Net Investment Income Tax at higher incomes; non-qualified dividends are taxed as ordinary income.
How much will my dividends grow with DRIP?
$10,000 plus $500 a month at a 3.5% yield, with 6% dividend growth and 4% price growth, reinvested for 20 years: about $356,211, paying $16,595 a year ($1,383 a month). Enter your own numbers below.
Portfolio in 20 years
$356,211
Dividends in year 20
$16,595/yr
Yield on cost
12.8%
Total dividend tax
$18,075
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Dividends in year 20
$16,595/yr
Portfolio in 20 years
$356,211
Yield on cost
12.8%
Total dividend tax
$18,075
Reinvest or take the cash?
- • You put in $130,000 over 20 years; the portfolio paid $120,499 in dividends in total.
- • In year 20 that is $1,383 a month before tax, $1,175 after federal tax. See if that income keeps you on track to retire.
- • With DRIP: portfolio $356,211, paying $16,595 a year ($1,383 a month) by year 20.
- • Taking cash: portfolio $204,428 plus $83,967 of dividends received along the way, paying $9,770 a year by year 20.
- • Tax on dividends: $2,489 in year 20, $18,075 over the whole period (qualified rates, 2026 brackets held flat).
Year by year
| Year | Portfolio | Dividends | Tax |
|---|---|---|---|
| 1 | $17,021 | $485 | $73 |
| 5 | $51,139 | $1,734 | $260 |
| 10 | $112,544 | $4,295 | $644 |
| 15 | $206,919 | $8,747 | $1,312 |
| 20 | $356,211 | $16,595 | $2,489 |
Monthly dividend calculator: how much do you need for the income you want?
At your 3.5% yield: $342,857 invested. At 3%: $400,000 · at 4%: $300,000 · at 5%: $240,000. Before tax.
Living off dividends in retirement: how much you need, and the tax
To take $4,000 a month in dividends you need about $1,200,000 invested at a 4% yield, or $1,600,000 at 3%. Qualified dividends share the long-term capital gains bands, so in 2026 a married couple filing jointly with $40,000 of other income (pension or IRA withdrawals, before the $32,200 standard deduction) can receive about $91,100 of qualified dividends a year at 0% federal tax. A single filer with $30,000 of other income has about $35,550 of 0% room.
| Per month | At 3% | At 4% | Tax/yr, couple | Tax/yr, single | Single, net/mo |
|---|---|---|---|---|---|
| $2,000 | $800,000 | $600,000 | $0 | $0 | $2,000 |
| $3,000 | $1,200,000 | $900,000 | $0 | $68 | $2,994 |
| $4,000 | $1,600,000 | $1,200,000 | $0 | $1,868 | $3,844 |
| $5,000 | $2,000,000 | $1,500,000 | $0 | $3,668 | $4,694 |
| $6,000 | $2,400,000 | $1,800,000 | $0 | $5,468 | $5,544 |
Invested amounts are before tax. Tax columns: federal tax on qualified dividends in 2026, couple filing jointly with $40,000 of other income, single filer with $30,000, both before the standard deduction, from this page's tax engine. State income tax is not included.
If you also receive Social Security, extra dividend income can make more of your benefit taxable, which this table does not model. Check that with the Social Security tax calculator, and use the retirement calculator to see whether dividends plus your benefit cover what you spend.
Starting at 45, 50 or 55: your dividend income at 65
$100,000 invested now plus $1,000 a month, at a 3.5% yield with 6% dividend growth and 4% price growth, reinvested in an IRA or 401(k) until 65.
| Start at | You put in | Portfolio at 65 | Dividends/mo at 65 |
|---|---|---|---|
| 45 (20 yrs) | $340,000 | $1,110,130 | $4,320 |
| 50 (15 yrs) | $280,000 | $672,322 | $2,379 |
| 55 (10 yrs) | $220,000 | $396,690 | $1,273 |
Starting at 45 instead of 55 gives about 3.4 times the monthly dividend income at 65, because reinvested dividends compound for ten more years. These are illustrations, not forecasts: yields, dividend growth and prices all vary. Enter your own numbers in the calculator above.
Selling shares as well? The capital gains tax calculator shows the 0%, 15% and 20% bands your dividends share with any gains.
Weighing dividends against a guaranteed rate? Compare with the CD calculator.
See the long-run effect of reinvesting with the compound interest calculator, or check the 3.8% tax on all your investment income with the NIIT calculator.
Last reviewed 6 November 2026 by the Richify AI agent team.
Reviewed by Felix, Richify's AI CFO — an AI author, presented as one.
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The calculator buys shares with your starting amount and each monthly contribution, grows the share price every month at your price-growth rate, and pays the dividend quarterly. The dividend per share starts at your yield on today's price and rises once a year at your dividend-growth rate. With DRIP on, each quarterly dividend buys more shares at that day's price, which then earn dividends of their own.
In a taxable account, each year's dividends are taxed with the 2026 federal rules: qualified dividends at 0%, 15% or 20% depending on where they fall on top of your other income, non-qualified dividends at ordinary rates, and the 3.8% Net Investment Income Tax above the threshold. Tax brackets are held at 2026 levels for future years, and the tax is treated as paid from other cash so reinvestment is not reduced. Returns are not guaranteed: dividends can be cut, and prices fall as well as rise.
Sources: IRC §1(h)(11) (qualified dividends taxed at capital gains rates); IRS Rev. Proc. 2025-32 §4.03 (2026 rate limits); IRC §1411 (Net Investment Income Tax).
How to use this calculator
- Enter your starting investment and how much you will add each month.
- Enter the dividend yield, how fast you expect the dividend to grow, and how fast you expect the share price to grow.
- Choose the number of years and whether dividends are reinvested (DRIP).
- For a taxable account, pick your filing status, other income and whether the dividends are qualified, to see the yearly tax.
- Read the final value, your dividend income, yield on cost and total tax, and use the income target to see what you need invested for a monthly income.
❓ Frequently Asked Questions
How much do I need to invest to earn $1,000 a month in dividends?
$400,000 at a 3% yield, $300,000 at 4% and $240,000 at 5%: annual income ÷ yield. Higher yields need less capital but often come with slower dividend growth or more risk of a cut.
Use the income target section of the calculator for any amount.
What is DRIP?
A dividend reinvestment plan automatically uses each dividend to buy more shares, often fractional shares with no commission. The new shares earn dividends too, so income compounds.
In a taxable account reinvested dividends are still taxed in the year they are paid, even though you never receive the cash.
How are dividends taxed in 2026?
Qualified dividends (from US companies and qualified foreign companies, on shares held more than 60 days in the 121-day period around the ex-dividend date) are taxed like long-term capital gains: 0% up to $49,450 of taxable income for a single filer ($98,900 joint), 15% up to $545,500 ($613,700 joint) and 20% above. Non-qualified dividends, such as ordinary REIT dividends and money-market fund distributions, are taxed at ordinary rates.
The 3.8% Net Investment Income Tax applies above $200,000 of modified AGI ($250,000 joint).
What is yield on cost?
Your current annual dividends divided by the total amount you have invested. If a company keeps raising its dividend, yield on cost rises over time even though the stock's quoted yield may not change.
The calculator shows yours in the final year.
Should I reinvest dividends or take the cash?
Reinvesting grows both the portfolio and future income faster; taking cash gives you income now. A common approach is to reinvest while working and switch DRIP off in retirement.
The calculator compares both for the same inputs.
How much do I need to live off dividends in retirement?
For $4,000 a month, about $1,200,000 invested at a 4% yield or $1,600,000 at 3%. Most retirees need less than their full spending from dividends, because Social Security covers part of it.
The table above shows $2,000 to $6,000 a month and the federal tax on each.
Are dividends tax-free in retirement?
Qualified dividends are taxed at 0% while your taxable income stays inside the 0% band ($98,900 married filing jointly, $49,450 single in 2026). A married couple with $40,000 of other income can receive about $91,100 of qualified dividends a year at 0% federal tax; a single filer with $30,000 has about $35,550.
State tax may still apply, and dividends can make more of a Social Security benefit taxable.
Do dividends in an IRA or 401(k) get taxed?
Not when they are paid. In a traditional IRA or 401(k) they grow tax-deferred and withdrawals are taxed as ordinary income; in a Roth account qualified withdrawals are tax-free.
Switch the account to tax-advantaged to see the projection without annual tax.
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Further Reading
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