Dividend Reinvestment Calculator
See how a dividend portfolio could grow when dividends are reinvested rather than taken as cash, and how much yearly income it could pay after tax.
Value after 20 years, reinvesting
$138,804
$58,000 of it is money you put in
Yearly dividends at the end
$3,975
after tax, about $331 a month
Extra from reinvesting
$17,639
compared with taking $26,486 in cash along the way
Reinvesting dividends vs taking them as cash
View as table
| Year | Money put in | Value, reinvesting | Dividends that year, reinvesting | Value plus cash, taking dividends |
|---|---|---|---|---|
| 0 | $10,000 | $10,000 | $0 | $10,000 |
| 1 | $12,400 | $13,138 | $290 | $13,131 |
| 2 | $14,800 | $16,487 | $375 | $16,452 |
| 3 | $17,200 | $20,063 | $466 | $19,972 |
| 4 | $19,600 | $23,883 | $565 | $23,700 |
| 5 | $22,000 | $27,965 | $673 | $27,645 |
| 6 | $24,400 | $32,329 | $790 | $31,819 |
| 7 | $26,800 | $36,996 | $917 | $36,231 |
| 8 | $29,200 | $41,989 | $1,054 | $40,893 |
| 9 | $31,600 | $47,333 | $1,203 | $45,817 |
| 10 | $34,000 | $53,054 | $1,365 | $51,014 |
| 11 | $36,400 | $59,183 | $1,540 | $56,498 |
| 12 | $38,800 | $65,751 | $1,731 | $62,282 |
| 13 | $41,200 | $72,790 | $1,937 | $68,380 |
| 14 | $43,600 | $80,339 | $2,162 | $74,806 |
| 15 | $46,000 | $88,437 | $2,405 | $81,576 |
| 16 | $48,400 | $97,127 | $2,670 | $88,705 |
| 17 | $50,800 | $106,456 | $2,957 | $96,211 |
| 18 | $53,200 | $116,474 | $3,268 | $104,111 |
| 19 | $55,600 | $127,237 | $3,607 | $112,422 |
| 20 | $58,000 | $138,804 | $3,975 | $121,165 |
What this calculator shows
Companies that pay dividends hand part of their profits to shareholders, usually every quarter. You can take that money as cash or use it to buy more shares, which then pay dividends of their own. This calculator runs the same investment both ways, side by side, so you can see how much of the final value comes from reinvesting and how much yearly income the portfolio could pay at the end.
How to fill it in
- Dividend yield is the yearly dividend as a percentage of the share price. Broad global or US index funds have recently yielded around 1% to 2%, while funds focused on high-dividend shares often yield 3% to 4% or more.
- Dividend growth is how fast the payout per share rises each year. Companies with long records of raising dividends have often grown them by a few percent a year, but nothing guarantees it, and dividends can be cut.
- Share price growth is how fast the price itself rises, separate from the dividends. Total return is roughly price growth plus the dividend yield.
- Tax on dividends covers what is withheld or taxed each year, for example 15% US withholding for many foreign investors with a W-8BEN form. Use 0% for dividends that are fully tax-free, such as in a Roth IRA for US investors; US dividends held in a UK ISA still lose 15% to US withholding.
What the calculator assumes
Dividends are paid quarterly and, in the reinvesting case, used straight away to buy more shares at the current price, with no trading costs. In the cash case, dividends are added up but not invested, so the comparison shows the full effect of reinvesting. The price rises smoothly every month and contributions are invested at the end of each month. Real share prices and dividends move unevenly, and a high yield can be a warning sign rather than a bargain, as our guide to dividend investing explains.
An illustration with steady growth rates you choose, not a forecast. Dividends are not guaranteed, share prices fall as well as rise, and taxes depend on where you live and the account you use. Not advice.