Roth IRA Yield Calculator
Estimate the tax free dividend income your Roth IRA can produce based on its dividend yield, payout growth, and share price appreciation.
Yield Parameters
Enter your portfolio yield details
Calculating...
How Yield and Price Growth Combine
Each year, the portfolio pays a dividend equal to its value times the current yield. That dividend is reinvested, and then the whole portfolio grows by your capital appreciation rate.
The yield also rises each year by your dividend growth rate, capped at 20%. Because both value and yield grow, income can climb quickly in later years.
Enter value and yield
Use your portfolio’s current value and its trailing dividend yield.
Add two growth rates
Dividend growth raises the yield; capital appreciation raises share prices.
Pick a time frame and tax rate
The tax rate shows what the same dividends would cost in a taxable account.
What Is the Formula?
Unlike the dividend calculator, this model includes price growth but no new contributions, which makes it useful for income planning on an existing balance.
- V : Portfolio value
- Your Roth IRA’s dividend holdings.
- y : Dividend yield
- Yearly dividends divided by portfolio value.
- g : Dividend growth rate
- How much the yield rises each year.
- a : Capital appreciation
- Yearly share price growth.
If you expect dividends to grow at the same pace as prices, set dividend growth to 0%. The yield then stays level and income rises with portfolio value alone.
Dividend Yield to Income Conversion
Use this chart to turn a yield into yearly and monthly income for common portfolio sizes. Inside a Roth IRA, all of it can be withdrawn tax free once distributions are qualified.
| Yield | $100,000 yearly | $100,000 monthly | $500,000 yearly | $1,000,000 yearly |
|---|---|---|---|---|
| 1.5% | $1,500 | $125 | $7,500 | $15,000 |
| 2.0% | $2,000 | $167 | $10,000 | $20,000 |
| 2.5% | $2,500 | $208 | $12,500 | $25,000 |
| 3.0% | $3,000 | $250 | $15,000 | $30,000 |
| 4.0% | $4,000 | $333 | $20,000 | $40,000 |
| 5.0% | $5,000 | $417 | $25,000 | $50,000 |
Example: $100,000 at a 2.5% Yield
These are the default inputs, a dividend growth portfolio held for 25 years with no new money added.
- 1Year one: $100,000 × 2.5% = $2,500 in dividends, reinvested.
- 2Value: ($100,000 + $2,500) × 1.05 = $107,625. Yield: 2.5% × 1.06 = 2.65%.
- 3Year two: $107,625 × 2.65% = $2,852 in dividends.
FAQs
It is the annual dividend a holding pays divided by its current price, shown as a percentage.
It is today’s annual dividend divided by what you originally paid, which rises as companies raise their payouts.
This tool adds share price growth, while the dividend calculator focuses on reinvestment and new contributions without price growth.
Both the portfolio value and the yield rise every year, so income compounds on two fronts at once.
Set dividend growth to 0% so the yield stays level while capital appreciation grows the payout.
No, very high yields can signal a risk of dividend cuts, so total return matters more than yield alone.
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