Dividend Reinvestment (DRIP) Calculator
See how dividend investing builds income over time. Enter what you’ll invest, the dividend yield, and how fast you expect prices and dividends to grow, and the calculator projects your portfolio and the yearly income it pays.
Reinvesting dividends — a DRIP — buys more shares that pay their own dividends, so income compounds. The calculator shows the difference side by side, plus your yield on cost: the income as a share of what you put in.
Calculator
Leave tax at 0% for an IRA or 401(k). Qualified dividends in a taxable account are taxed at 0%, 15%, or 20%.
Annual dividend income in year 20
$5,981
about $498 a month
- Portfolio value
- $178,730
- Total contributed
- $58,000
- Total dividends received
- $50,609
- Yield on what you invested
- 10.3%
Reinvesting grows the portfolio to $178,730 vs. $108,356 without — and yearly income to $5,981 vs. $3,693.
Yearly dividend income
Assumes a steady yield and growth rate with quarterly dividends. Real dividends can be cut, and prices fall as well as rise. Educational estimate, not investment advice.
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Calculation Formulas
Paid quarterly, as most U.S. stocks do.
With DRIP on; otherwise dividends are paid out as cash.
How your income compares with what you invested.
Key Figures
| Figure | Value | Description |
|---|---|---|
| Dividend frequency | Quarterly | Contributions are added each quarter. |
Note: Results are estimates for planning purposes. Rates, fees, taxes, and insurance vary by lender and location — confirm exact figures with a licensed professional before making financial decisions.
Standards & Sources
Last verified: October 2026
- Constant-rate projection
Assumes a steady yield and growth rate. Companies can cut dividends, and prices fluctuate.
- Tax treatment
Qualified dividends are taxed at long-term capital gains rates (IRS Topic 404).
How to Use This Calculator
- Enter your initial investment and monthly contribution.
- Enter the dividend yield and expected yearly growth of prices and dividends.
- Choose whether to reinvest dividends and enter any tax on dividends.
- Read your future income, portfolio value, and the effect of reinvesting.
Frequently Asked Questions
How much dividend income will I have?
It depends on how much you invest, the yield, and growth. Investing $10,000 plus $200 a month at a 3.5% yield with 5% annual growth, reinvesting dividends, builds about $179,000 in 20 years paying roughly $6,000 a year.
How much does reinvesting dividends help?
A lot over long periods. In the same example, reinvesting grows the portfolio to about $179,000 versus $108,000 taking dividends as cash, and yearly income to about $6,000 versus $3,700.
What is yield on cost?
Your annual dividend income divided by the total amount you invested. As dividends grow, yield on cost rises above the starting yield even though the current yield stays the same.
How are dividends taxed?
In taxable accounts, qualified dividends are taxed at 0%, 15%, or 20% depending on income; ordinary dividends at your regular rate. Dividends in an IRA or 401(k) aren’t taxed until you withdraw (or ever, in a Roth).
Guides to go with this calculator
What Is a Good ROI? How to Calculate Your Return
ROI is simple to calculate and easy to misread. Here’s the formula, what a “good” return looks like, and the one adjustment that makes two investments actually comparable.
What Is the Average Stock Market Return?
You’ll hear “the market returns 10% a year.” It’s true on average — and misleading if you stop there. Here’s the real number, the inflation-adjusted number, and how to plan around both.
Rule of 72: How to Double Your Money (With Table)
Divide 72 by your annual return and you get the years it takes to double your money. Here’s the formula, a ready-made table, and where the shortcut breaks down.
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