How much income could your dividend portfolio pay you? Enter your starting amount, what you add each month and the yield, and see your yearly and monthly dividend income grow, with or without reinvesting.
See how much yearly income your portfolio could pay, with or without reinvesting dividends.
Dividend income paid in each year.
| Year | Dividends that year | Per month | Portfolio |
|---|
The portfolio you would need to earn a monthly income at the yield above.
How dividend income grows
Your dividend income grows three ways: the money you keep adding, the dividends you reinvest to buy more shares, and companies raising their dividends over time. Together they can turn a small yearly payout into a meaningful income.
Example: $25,000 to start, $500 a month, a 4% yield, dividends rising 4% a year and prices rising 3% a year. After 20 years with reinvesting, the portfolio pays about $17,500 a year. Taking the cash instead, it pays about $9,700 a year.
Why reinvesting matters
Reinvesting, often called a DRIP, uses each payout to buy more shares, which then pay their own dividends. In the early years the difference is small. After 15 to 20 years it can nearly double your income compared with taking the cash.
How much do you need to live off dividends?
Divide the yearly income you want by the yield. To earn $2,000 a month ($24,000 a year) at a 4% yield, you need about $600,000. At 5% you need $480,000. Higher yields need less money, but they often come with slower growth or more risk of a dividend cut.
Taxes on dividends
- In a TFSA: Canadian dividends are tax free. US dividends lose 15% to US withholding tax. Check your TFSA room.
- In an RRSP: the US withholding tax on US-listed holdings is generally waived under the tax treaty.
- In a taxable account: Canadian dividends get the dividend tax credit, which can make them cheaper to own than interest income.
Planning to live off the income one day? Pair this with the FIRE calculator to find your target number.
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Frequently asked questions
What is a good dividend yield?
Broad Canadian dividend funds often yield around 3% to 5%. Yields far above that can signal a company in trouble or a fund using options that limit growth.
Are dividends guaranteed?
No. Companies can cut or stop dividends, especially in a recession. Owning many companies through a fund spreads that risk.
Is dividend growth or a high yield better?
Dividend growth stocks start with less income but often raise payouts faster. High-yield holdings pay more now but may grow slowly. Use the calculator to compare both.
This calculator gives an estimate for general information only. Not financial advice.
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