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Passive income from dividends

See how much you could receive each month in dividends, the effect of reinvesting them and how long it takes to reach the income you want.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Oct 31, 2026

Example values. Past payouts do not guarantee future ones.

Contributions
Yield
Goal

The goal is in today’s money: the simulation raises it by inflation.

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—Monthly income at the end
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Monthly income with and without reinvesting

Dividends per month over time, compared with the goal adjusted for inflation.

Tap the chart to see the values.

Where your portfolio comes from

What you put in, reinvested dividends and price growth, year by year.

Tap the chart to see the values.

Year by year

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Monthly dividend = portfolio × dividend yield ÷ 12 × (1 − tax)
Portfolio = portfolio × (1 + monthly growth) + reinvested dividend + contribution; monthly growth = (1 + yearly)^(1/12) − 1
Goal in month m = desired income × (1 + inflation)^(m/12); portfolio needed = goal at the end ÷ (after-tax yield ÷ 12)

Assumptions and limits

  • Constant rates: projected or past returns do not guarantee future results. This is not investment advice. Dividends can be cut or suspended and prices can fall.
  • The tax rate you type is applied to every dividend; real rules vary by country and account type.
  • Constant yield and price growth, monthly payouts; it ignores capital gains tax, fees and the risk of price drops or dividend cuts.

Official sources and references

Frequently asked questions

What is dividend yield?

The yearly dividends divided by the price. A stock at $50 that pays $2 a year yields 4%. The calculator uses the yield on your whole portfolio, held constant over the period.

How much do I need to live on dividends?

Divide the yearly income you want by the yield after tax. For $2,000 a month at a 6% yield and 15% tax, you need about $470,000 in today’s money; the "Portfolio needed for the goal" card shows the figure adjusted for inflation at the end of the period.

How do I read the default example?

With $20,000 to start, $500 a month, a 6% yield, 2% price growth and 15% tax, reinvesting everything, after 15 years the portfolio reaches $217,293 and pays $923 a month ($593 in today’s money). The $2,000 goal is not reached: adjusted for inflation it becomes $3,116, and dividends cover about 30% of it. Reinvesting adds $364 a month compared with spending the dividends.

Should I reinvest dividends?

If you do not need the income yet, reinvesting usually leads to a much higher final income, because the new shares also pay dividends. The chart compares both paths so you can see the difference in your case.

How are taxes handled?

The tax rate you type is deducted from every dividend, both when you receive it and when you reinvest it. Real rules depend on the country, the type of account and whether the stocks are foreign; check with a tax professional.

What does the calculator leave out?

It assumes a constant yield and price growth, monthly payouts and no fees. Real dividends can be cut, prices can fall and high yields are often less stable. It also ignores capital gains tax when you sell.

When should I talk to a professional?

When you plan to live on dividends, your portfolio is large or concentrated in a few holdings, or you have questions about how dividends and capital gains are taxed where you live. A fee-only financial planner or tax adviser can help.

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How to estimate passive income from dividends

Dividend income depends on two things: how much you have invested and the dividend yield, the yearly payout divided by the price. A portfolio of $300,000 yielding 4% pays about $12,000 a year, or $1,000 a month, before tax.

How much do you need?

Portfolio needed = desired yearly income ÷ dividend yield. For $2,000 a month ($24,000 a year) at a 4% yield, you need $600,000; at 6%, $400,000. A higher yield needs less money, but very high yields often come with more risk: the payout may be cut, or the price may be falling.

Reinvesting makes the difference

While you do not need the income, reinvesting dividends buys more shares, which pay more dividends the next time. Over 15 or 20 years, this can multiply the final income. Most brokers offer automatic dividend reinvestment.

Taxes

In many countries dividends are taxed, either withheld at the source or on your tax return, and rates can differ for foreign stocks. Tax-advantaged retirement accounts may defer or remove the tax. Type the rate that applies to you; the calculator deducts it from every payout.

Yield or growth?

High-yield funds (such as real estate funds or utilities) pay more today but tend to grow slowly. Dividend-growth companies pay less at first, reinvest part of their profits and can raise payouts faster than inflation. Many investors mix both.

Dividends are not guaranteed: companies and funds can cut or suspend them, especially in recessions. Diversifying across many holdings and sectors reduces the risk of a sudden drop in income.