Living Off Dividends Calculator
How much do you need to live off dividends? The formula is simple: annual spending ÷ dividend yield = portfolio needed. To live on $60,000/year at a 4% yield, that's $1.5 million. Set your own spending, yield, and timeline below to find your number — and how many years of contributions and dividend growth it takes to reach it.
Your Income Goal
$24,000/yr from dividends
At $500/month with 4% yield and 6% dividend growth, you'll reach $2,000/month in passive dividend income in 15 years.
Monthly Income Over Time
Capital Needed by Yield
This is a projection tool for illustration only — not financial advice. Past performance does not guarantee future results.
How much do you need to live off dividends?
| Income goal | 2.5% yield | 3% yield | 3.5% yield | 4% yield | 5% yield | 6% yield |
|---|---|---|---|---|---|---|
| $1,000/mo ($12,000/yr) | $480,000 | $400,000 | $342,857 | $300,000 | $240,000 | $200,000 |
| $2,000/mo ($24,000/yr) | $960,000 | $800,000 | $685,714 | $600,000 | $480,000 | $400,000 |
| $3,000/mo ($36,000/yr) | $1,440,000 | $1,200,000 | $1,028,571 | $900,000 | $720,000 | $600,000 |
| $4,000/mo ($48,000/yr) | $1,920,000 | $1,600,000 | $1,371,429 | $1,200,000 | $960,000 | $800,000 |
| $5,000/mo ($60,000/yr) | $2,400,000 | $2,000,000 | $1,714,286 | $1,500,000 | $1,200,000 | $1,000,000 |
| $7,500/mo ($90,000/yr) | $3,600,000 | $3,000,000 | $2,571,429 | $2,250,000 | $1,800,000 | $1,500,000 |
| $10,000/mo ($120,000/yr) | $4,800,000 | $4,000,000 | $3,428,571 | $3,000,000 | $2,400,000 | $2,000,000 |
How much do I need to make $2,000 a month in dividends?
To collect $2,000 per month ($24,000 per year) in dividends, you need about $685,714 invested at a 3.5% average yield, $600,000 at 4%, or $480,000 at 5%. A diversified blue-chip dividend portfolio typically yields 3–4%, so a realistic planning figure for a $2,000/month goal is $600,000–$800,000. Higher yields shrink the required capital but raise dividend-cut risk.
Can I live off dividends with $500,000?
A $500,000 portfolio pays about $17,500 per year at a 3.5% yield, $20,000 at 4%, or $25,000 at 5% — roughly $1,450–$2,080 per month before tax. That covers a lean budget or meaningfully supplements other income, but falls short of the median US household's spending. Most investors treat $500,000 as the milestone where dividend growth and continued contributions compound toward full coverage rather than the finish line itself.
What yield is realistic without taking on yield-trap risk?
A sustainable dividend portfolio typically yields 3–5%. Dividend-growth ETFs like SCHD and the dividend aristocrats sit near 3–3.5% with reliable raises; balanced income portfolios reach about 4%; adding REITs and covered-call funds can push 5–8% at the cost of slower growth and higher cut risk. Yields far above 8% usually signal a falling share price or an unsustainable payout — the classic yield trap.
This tool is for educational and informational purposes only and does not constitute investment, financial, tax, or legal advice. Consult a licensed professional before making investment decisions.
Past performance does not guarantee future results. All projections are hypothetical estimates based on user-provided inputs and may differ materially from actual outcomes.
By using this tool you agree to our Terms of Service and Privacy Policy.
Frequently Asked Questions
Tracking your progress toward the number matters as much as computing it — REWD's dividend tracker syncs your brokerage and projects your income forward with each holding's real growth rate. Read the full guide: How to Live Off Dividends.