How much do I need invested to live off dividends?

Divide your target annual income by the yield. At a 4% yield, $40,000 a year needs $1,000,000 invested. Higher yields need less capital but often carry more risk, and dividends can be cut at any time.

Is dividend yield guaranteed?

No. Yield is the trailing or declared dividend divided by the current price. Companies can reduce or stop dividends, and a yield that looks unusually high is often the result of a falling share price.

Usually yes, and the treatment depends on your jurisdiction, your account type and whether the dividend is qualified. This calculator shows gross income before any tax or withholding.

Dividend Income Calculator

Work out the income an amount produces at a given yield — or start from the income you want and see the capital it would take. Yields are not guaranteed and dividends can be cut.

Amount invested$Dividend yield%Annual dividend divided by price.Annual dividend growth (optional)%An assumption — payouts can also be cut.

Annual income: $4,000.00
Quarterly: $1,000.00
Monthly: $333.33

Gross of tax and any withholding, which depend on your jurisdiction and account type.

How this is calculated

annual income = invested x yield%   |   capital needed = target income / yield%

yield%: annual dividend divided by the current share price
target income: the yearly income you want the holding to produce

Worked example

At a 4% yield, $100,000 invested pays about $4,000 a year, or $333 a month. Running it the other way, a $40,000 annual income at that same yield needs $1,000,000 invested.

Common questions

How much do I need invested to live off dividends?: Divide your target annual income by the yield. At a 4% yield, $40,000 a year needs $1,000,000 invested. Higher yields need less capital but often carry more risk, and dividends can be cut at any time.
Is dividend yield guaranteed?: No. Yield is the trailing or declared dividend divided by the current price. Companies can reduce or stop dividends, and a yield that looks unusually high is often the result of a falling share price.
Are dividends taxed?: Usually yes, and the treatment depends on your jurisdiction, your account type and whether the dividend is qualified. This calculator shows gross income before any tax or withholding.

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This tool performs arithmetic on the figures you enter. It is for informational and educational purposes only, is not investment, tax or financial advice, and is not a recommendation to buy, sell, or hold any security. Projections are assumptions, not forecasts. Always do your own due diligence.

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