Finance / Planning
Monthly Dividend Calculator
Turn a monthly dividend income goal into capital needed today and a monthly contribution for a future goal. Compare starting yields of 3%, 4%, 5%, 6% and 8%.
Monthly Dividend Calculator: This calculator works backwards from an income goal. Annual income is the monthly goal multiplied by 12. Divide that amount by portfolio yield to find gross capital needed today; for a net goal also divide by one minus the withholding rate. The total required capital is shown even when you already have investments. For a future goal, current holdings reduce the monthly contribution needed. Monthly purchases occur at the start of each month at a constant assumed share price. They receive a prorated annual dividend, and net dividends are reinvested once at year end. Dividend growth increases income per share from year 2. At the end of the selected horizon, the calculator compares the following year's dividend run rate with your goal. This monthly equivalent does not imply that a portfolio pays every month. The sensitivity table changes the starting yield while keeping your other assumptions fixed. These are arithmetic scenarios, not guaranteed returns or investment or tax advice. Runs 100% locally in your browser with zero server file uploads.
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This calculator uses your assumptions. It is not investment or tax advice. Enter all figures yourself; no market data or ticker lookup is used.
| Portfolio yield | Capital needed today | Monthly contribution needed |
|---|---|---|
| 3% | 941,176.47 | No time horizon |
| 4% | 705,882.35 | No time horizon |
| 5% | 564,705.88 | No time horizon |
| 6% | 470,588.24 | No time horizon |
| 8% | 352,941.18 | No time horizon |
Capital today = monthly goal × 12 ÷ annual yield, divided again by (1 − tax rate) for a net goal. All amounts use the same currency. Leave years at zero for an immediate goal; current holdings do not reduce the total capital requirement.
For a future goal, monthly deposits buy at each month start. Share price is held constant and net dividends are reinvested once at year end. Dividend growth increases income per share, not the share price. The goal is the next year's annual dividend on the portfolio at the end of the horizon, divided by 12. This is a run rate, not a promise of monthly payments. Contribution amounts stay constant.
Tax reduces reinvestment even for a gross income goal. A zero contribution means the current portfolio already meets the goal under these assumptions. Sensitivity rows change only the starting yield; dividends and yields are not guaranteed.
Capital for an income goal
FINRA explains dividend yield as annual dividends divided by price (https://www.finra.org/investors/investing/investment-products/stocks). The entered dividend and price must use the same currency.
Capital = annual income ÷ yield. Net income divides that requirement by (1 − withholding rate). The yield sensitivity rows use the same equation.
Reinvestment and timing
Investor.gov describes dividend reinvestment plans (https://www.investor.gov/introduction-investing/investing-basics/glossary/dividend-reinvestment-plans-drips). Reinvestment buys more shares with dividend cash.
Monthly contributions buy at the start of each month at the year's opening price. They earn 12/12 through 1/12 of the year's dividend per share. Price is fixed in this goal calculator; net dividends reinvest at year end. The goal uses ending shares multiplied by next-year dividend per share, divided by 12.
How to use it
- Enter monthly income and choose gross or net, then enter portfolio yield and withholding.
- Optionally enter dividend growth, whole years until the goal and your current portfolio.
- Read required capital, monthly contributions with DRIP and the yield sensitivity table.
Privacy & limitations
All assumptions are entered by you and calculated in your browser. No market data or ticker lookup is used. This is not investment or tax advice.
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Frequently asked questions
How much capital produces 2,000 a month net?
At a 5% gross yield and 15% withholding, capital = 2,000 × 12 ÷ (0.05 × 0.85) = 564,705.88 in the currency of your inputs. A different yield or withholding rate changes the requirement.
What does capital needed today mean?
It is the total portfolio needed at the starting yield, without waiting for dividend growth. Your current portfolio does not change this total. It is used separately when solving future monthly contributions.
How does the time horizon affect the contribution?
The contribution solver includes beginning-month purchases, prorated dividend income, annual DRIP after withholding and your assumed dividend growth. It targets the next-year income run rate at the end of the horizon. It assumes constant share price and constant monthly deposits.
Why can my contribution be zero?
Under the entered assumptions, your current portfolio with reinvestment may already reach or exceed the future goal. Zero does not guarantee that real dividends will meet the goal.
Is this investment or tax advice?
No. This calculator applies your entered assumptions and the stated arithmetic rules. It does not recommend investments, predict dividends or determine your tax liability.
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