Dividend Income Goal Calculator
At a 4% dividend yield, $1,000 a month in dividends ($12,000 a year) takes about $300,000 invested before tax, or $375,000 if 20% of each dividend goes to tax. Enter your own target, yield and tax rate below.
Your income target
This is a capital target today. It does not estimate how long it takes to get there or assume the yield stays constant.
To receive $1,000 a month after a 0% dividend tax at a 4% yield.
$12,000 a year ÷ (4% × (1 − 0%))
= $300,000
Required capital = annual after-tax goal ÷ [yield × (1 − tax rate)]
How yield changes the target
Same $1,000 a month after a 0% tax.
Common income targets
At a 4% yield, before dividend tax. Required capital = annual income ÷ yield.
- $100 a month$1,200 a year$30,000
- $250 a month$3,000 a year$75,000
- $500 a month$6,000 a year$150,000
- $1,000 a month$12,000 a year$300,000
- $2,000 a month$24,000 a year$600,000
Want to see when projected income could reach a target?
Model contributions and reinvestment in the full calculator; its Milestones view shows the projection year each monthly income level is reached.
Open the full calculator with this yield and tax rateTurn income into a capital target
Divide the annual income you want by the assumed dividend yield. If your goal is after tax, reduce the yield by the tax rate first.
$12,000 a year ÷ 0.04 = $300,000
Tax raises the target because only the after-tax part of each dividend counts toward the goal. With a 20% effective dividend tax rate, a 4% yield keeps 3.2%, so $12,000 a year needs $15,000 of dividends and $375,000 of capital. Your actual rate depends on how the dividends are classified, the type of account and where you are taxed; the calculator applies the single rate you enter.
What this target leaves out
This is a snapshot of required capital, not a forecast of the time needed to accumulate it. It does not model fees, capital-gains tax, changes to distributions, or account-specific rules. The yield is your assumption: yields, tax treatment and dividend payments can all change.
Read the methodologyHow much do you need at different yields and tax rates?
Capital needed for $1,000 a month after tax, from the same formula as the calculator. A higher tax rate raises the target; a higher yield lowers it, but the yield is an assumption about what the portfolio will pay, not a promise.
| Yield | No tax | 15% tax | 20% tax | 25% tax |
|---|---|---|---|---|
| 3% | $400,000 | $470,588 | $500,000 | $533,333 |
| 4% | $300,000 | $352,941 | $375,000 | $400,000 |
| 5% | $240,000 | $282,353 | $300,000 | $320,000 |
| 6% | $200,000 | $235,294 | $250,000 | $266,667 |
What if dividends are cut?
A cut lowers the yield on money you have already invested, so the same income needs more capital. Starting from a 4% yield:
| Dividend cut | Yield after the cut | No tax | 20% tax |
|---|---|---|---|
| No cut | 4% | $300,000 | $375,000 |
| 10% | 3.6% | $333,333 | $416,667 |
| 20% | 3.2% | $375,000 | $468,750 |
| 30% | 2.8% | $428,571 | $535,714 |
Seen the other way, $300,000 that pays $1,000 a month at a 4% yield would pay about $800 a month after a 20% cut. These figures illustrate the arithmetic; they do not predict a cut.
Can $100,000 make $1,000 a month in dividends?
At a 4% yield, $100,000 pays about $333 a month before tax ($4,000 a year). Reaching $1,000 a month from $100,000 would take a 12% yield, three times the 4% example: at 12%, the target is $100,000. A yield can be that high because the share price has fallen or the payout may not last, and the yield alone does not tell you which.
What a high dividend yield can and can’t tell youHow much for $500 or $2,000 a month?
- $500 a month: $150,000 at a 4% yield before tax, or $187,500 at a 20% tax rate.
- $2,000 a month: $600,000 at a 4% yield before tax, or $750,000 at a 20% tax rate.
The target scales with the income: twice the monthly goal needs twice the capital at the same yield and tax rate.
Will $1,000 a month arrive every month?
Not necessarily. The monthly figure is an average: annual dividends ÷ 12. Each company or fund pays on its own schedule, which may be quarterly, monthly, twice a year or yearly, and the amounts can change or stop. If $12,000 a year were all paid quarterly on the same dates, it would arrive as about $3,000 four times a year, with nothing in the months between.
See an illustrative payment calendar in the Monthly Dividend CalculatorIncome goal questions
Should the goal be before or after tax?
Enter the income you want to keep. The calculator grosses it up using your flat dividend tax rate, so a 20% rate turns a $12,000 after-tax goal into $15,000 of dividends.
Do reinvested dividends count toward the income goal?
Not as income. The target assumes you take dividends as cash. While you are still building the portfolio, reinvesting buys shares that raise future income; the full calculator projects that, and its Milestones view shows the projection year each monthly income level is reached.