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Dividend Reinvestment Calculator (DRIP)

A dividend reinvestment calculator (DRIP calculator) shows you the difference between taking dividends as cash and reinvesting them to buy more shares. Enter your starting investment, yield, annual dividend growth, share price growth, and number of years to see both ending values side by side.

Inputs

Results

Ending value WITH reinvestment--
Ending value WITHOUT reinvestment--
Reinvestment advantage--
Total dividends collected (no DRIP)--
Final share count (DRIP)--
Annual income in final year (DRIP)--

Enter your figures above. Results update live and stay in your browser.

Jessica Martinez
By Jessica Martinez, Contributing Writer, Business & Finance
Updated June 20, 2026

Just want income totals?

The plain Dividend Calculator shows annual income, yield on cost, and per-payment amounts without the reinvestment layer.

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How dividend reinvestment works

Dividend reinvestment is the practice of using each dividend payment to buy more shares rather than receiving the cash. Those additional shares then earn their own dividends, which buy still more shares, creating a compounding cycle that accelerates portfolio growth over time.

The math behind the gap. Each year, two things happen under DRIP: your share count grows because reinvested dividends bought new shares, and each of those shares is now worth more if the price appreciated. Without reinvestment, you earn the same dividends as cash but your share count stays flat, so price appreciation acts on a smaller base. The longer the period, the wider the gap between the two paths.

Reinvestment vs. taking cash: which is right for you

Reinvesting makes the most sense when you have time on your side and do not need current income. A 35-year-old with a 20-year runway who does not need the quarterly checks benefits from the compounding. A retiree drawing on dividends to cover living expenses has the opposite situation: the cash serves a purpose that a fractional share does not. The calculator shows the cost of taking cash so you can make the comparison honestly for your own situation.

DRIP programs at brokerages

Most major U.S. brokerages offer automatic dividend reinvestment at no commission, and many allow fractional share purchases so no cash sits idle waiting for a full share. Some company-sponsored DRIPs offer a small discount on the reinvestment price, typically 1 to 5 percent. Check your brokerage account settings to enable it; the default at most brokerages is to deliver cash.

Taxes on reinvested dividends

Reinvested dividends are taxable income in the year the dividend is paid, even though you never received cash. Each reinvestment also creates a new tax lot at the price you reinvested, which matters when you eventually sell. In a tax-advantaged account such as an IRA or 401(k), reinvestment has no immediate tax consequence. For a taxable account, keep records of each reinvestment lot because brokerages track them, but understanding the total cost basis avoids surprises at sale.

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Model your total portfolio value including regular contributions on top of DRIP growth.

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This tool is informational and educational. It is not financial or investment advice. Dividends are not guaranteed, and investing involves risk including possible loss of principal.

Jessica Martinez
About the author
Jessica Martinez
Contributing Writer, Business & Finance, Encore Editorial

A reformed credit analyst, Jessica Martinez turns dense financial paperwork into something you can actually use. She writes the explainers behind these calculators and checks every formula against a primary source before it ships.

Good to know

FAQs

How do you calculate dividend reinvestment?

Each period, dividends paid equal shares times dividend per share. Those dollars buy new shares at the current price. New shares are added to the running count. Price and dividend per share both grow by their respective rates each year. Repeat for each year. The ending portfolio value is total shares times final share price.

Is it a good idea to do dividend reinvestment?

For long-term investors who do not need current income, reinvestment historically has added meaningfully to total return. Research on the S&P 500 shows a large fraction of its long-run return came from dividends reinvested rather than spent. The main caveat: reinvested dividends in a taxable account are still taxable income in the year they are paid.

How much money do I need to make $10,000 a month in dividends?

At a 4 percent yield you need roughly $3 million. At 5 percent it is $2.4 million. At 6 percent it is $2 million. DRIP accelerates the path to those numbers by growing your share count each year rather than starting the compounding clock over at a flat base.

How much money do you need to make $100,000 a year in dividends?

At 4 percent yield you need $2.5 million. At 5 percent the number is $2 million. At 3 percent you need about $3.33 million. The reinvestment calculator shows how starting from a smaller amount and letting dividends compound closes that gap over time.

What is the difference between DRIP and manual reinvestment?

A DRIP program automatically buys shares with each dividend, sometimes in fractional amounts and occasionally at a small discount. Manual reinvestment means you collect the cash and place a buy order yourself. The compounding effect is the same. DRIPs are more automatic but give you less control over purchase timing.