Income alongside your salary:
what would your monthly dividend goal take?

How much of your living costs would you like dividends to cover?

You can start with part of your fixed spending rather than all living costs. A smaller milestone makes the required investment base easier to understand. These targets assume a 4% annual yield and represent pre-tax monthly averages, not identical payments every month.

How much of the target could your current assets support?

At a 4% annual yield, current dividend assets of $20,000 imply a pre-tax monthly average of $67. Compare your holdings with the assets required for a monthly average target of $1,000.

You do not have to fund the whole investment base at once. Enter current assets and a monthly contribution to explore accumulation, or choose a target period to estimate the monthly contribution required.

Monthly contributions change the future income base

These examples invest at month-end for 20 years from the current starting balance, assuming a constant 6% annual total return. The accumulation assumption includes reinvested dividends and excludes taxes, costs and actual price fluctuations.

The monthly averages apply the dividend yield to end-of-period assets. Do not read them as dividends both spent during accumulation and fully reinvested. If a plan falls short, compare contribution amounts, time horizons and targets rather than only increasing the assumed total return.

Does a higher dividend yield solve the funding gap?

For a pre-tax monthly average of $1,000, the required assets are $400,000 at a 3% annual yield, $300,000 at 4% and $200,000 at 6%.

A higher yield lowers the calculated capital requirement, but sustainability and changes in asset value also matter. A falling share price can raise the quoted yield, and distributions have different sources and payment patterns. Yield alone is not enough to assess a long-term spending plan.

Dividend yield estimates income from assets; total return is the accumulation assumption including price changes and reinvested dividends. Adding yield again to a total-return assumption can count dividends twice. This calculator grows assets using total return, then applies the dividend yield to estimate monthly income.

Separate a pre-tax monthly average from spendable income

A monthly average divides annual dividends by 12. Actual holdings may pay monthly, quarterly, semiannually or annually, and amounts can vary. Taxes, exchange rates for foreign assets and your own spending schedule can make spendable income differ from the estimate.

Fund distributions also affect net asset value when paid. Consider cash received together with the value of remaining holdings rather than treating distributions as free additional returns. After setting a goal, review actual distribution records and price history.

Source: SEC — fund distributions · Explore reinvesting dividends →

Required asset calculation

The monthly dividend goal is multiplied by 12, then divided by the expected annual dividend yield.

Two ways to plan

Enter a monthly investment to estimate the time to reach the goal, or enter a target period to calculate the monthly investment required.

Values shown in the chart

The same dividend yield is applied to projected assets at each point. The chart does not forecast actual company dividend growth.

Planning for a $1,000 monthly dividend

This example uses a 4% dividend yield, $10,000 already invested, a 6% total return, and a 10-year target.

Assets required

$300,000

Monthly investment

$1,720

Monthly dividend goal

$1,000

The required asset is based on dividend yield. The path to build that asset uses a separate total-return assumption. These two rates answer different questions.

Frequently asked questions