Dividend Income Calculator
Project your passive dividend income over time. See how DRIP reinvestment, dividend growth, and regular contributions build wealth that pays you.
Portfolio Details
Advanced Options
Dividends are automatically reinvested to purchase more shares.
Current Dividend Income
Projected Income (Year 20)
Total Dividends Collected
Income Growth Insight
- Your dividend income grows from $3,500.00/yr to $43,584/yr — a 1145% increase.
- DRIP reinvestment accelerates compounding by purchasing more shares with each dividend payment.
- At a 5% annual dividend growth rate, your yield on cost rises from 3.5% to 19.81%.
Key Insights
Important concepts for building dividend income
DRIP Compounding Power
Reinvesting dividends through DRIP creates exponential growth. A $100,000 portfolio at 3.5% yield produces $3,500 in year one. With DRIP, by year 20 those reinvested dividends purchase additional shares that generate their own dividends, creating a powerful compounding snowball effect.
Qualified vs Ordinary Dividends
Qualified dividends are taxed at favorable capital gains rates (0%, 15%, or 20%), while ordinary dividends are taxed as regular income. Most dividends from U.S. companies held 60+ days qualify for the lower rate. REITs typically pay ordinary dividends. Understanding this distinction can save thousands in taxes annually.
Dividend Aristocrats
Dividend Aristocrats are S&P 500 companies that have increased dividends for 25+ consecutive years, including Johnson & Johnson, Coca-Cola, and Procter & Gamble. They offer reliability, moderate yield, and consistent growth that historically outpaces inflation.
Frequently Asked Questions
Common questions about dividend investing and passive income
Disclaimer: This calculator is for educational and informational purposes only and does not constitute investment, tax, or financial advice. Actual dividend payments depend on company earnings and board decisions, and can be reduced or eliminated at any time. Past dividend performance does not guarantee future results. Tax rates vary by jurisdiction and individual circumstances. Consult a qualified financial advisor before making investment decisions.