How much do you need to make $100,000 a year in dividends?
About $2,500,000, invested at a 4% dividend yield. That's about $8,333 a month, and a portfolio yielding 4% pays 4% of its value each year, so you need $100,000 ÷ 0.04.
Portfolio needed by yield
| Dividend yield | Portfolio needed | Pays a year |
|---|---|---|
| 3% | $3,333,333 | $100,000 |
| 4% | $2,500,000 | $100,000 |
| 5% | $2,000,000 | $100,000 |
Portfolio needed = Yearly income ÷ (Yield ÷ 100) → $100,000 ÷ 0.04 = $2,500,000
A higher yield needs less money, but yield isn’t free. Broad US stock indexes have yielded under 2% in recent years, and many established dividend payers yield between 2% and 5%. A yield far above similar companies often means the market expects a cut. The Dividend Yield Calculator works out the yield of any stock from its price and dividend.
How long it takes
Starting from $0, with every dividend reinvested. Example assumptions: a 4% yield, dividends growing 5% a year and share prices growing 4% a year (the Income Goal Calculator’s starting numbers). Your own results will differ.
| Saving each month | Time to $100,000 a year |
|---|---|
| $1,000 | 31 years, 1 month |
| $2,000 | 25 years, 1 month |
| $3,000 | 21 years, 1 month |
| $5,000 | 17 years |
Doubling what you save doesn’t halve the time, because reinvested dividends do more of the work the longer they compound. Money you already have invested shortens it most: enter it below.
Try your own numbers
- Portfolio needed
- $2,500,000
- Time to $100,000 a year
- 25 years, 1 month
Open these numbers in the full Income Goal Calculator to change growth rates, reinvestment and payment frequency, and see the year-by-year chart.
Questions
How much do I need to invest to make $100,000 a year in dividends?
$100,000 a year is $100,000 a year. At a 4% dividend yield that takes a $2,500,000 portfolio: $100,000 ÷ 0.04. At 3% it takes $3,333,333, and at 5% $2,000,000.
How long does it take to reach $100,000 a year in dividends?
It depends mostly on how much you add each month. Starting from nothing and saving $2,000 a month, with a 4% yield, dividends growing 5% a year, share prices growing 4% a year and every dividend reinvested, it takes about 25 years, 1 month. These are example assumptions, not a forecast.
Is that before or after tax?
Before tax. Qualified dividends are taxed at 0%, 15% or 20% at the federal level depending on your income, and ordinary dividends at your regular rate. In an IRA or 401(k) they aren't taxed when paid. To have $100,000 a year after tax in a taxable account, aim a little higher; the Dividend Tax Calculator shows what you'd keep.