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Accumulate · DRIP

Dividend Snowball — DRIP with real taxes

Reinvest every dividend and watch the share count snowball. This one derives yield as D/P each year (dividend growth and price growth are separate inputs, so return is never double-counted), taxes qualified vs non-qualified dividends with the 2026 LTCG brackets + 3.8% NIIT, reinvests only the after-tax dollars, and can drop a one-time −30% dividend cut on the path. Every figure is a p5/median/p95 range, not a single promise.

LTCG + NIIT · Rev. Proc. 2025-32 / IRC §1411 · asOf 2025-10 S&P 500 yield anchor ≈1.1% · multpl · asOf 2026-06 Updated 2026-07-06

Assumptions

live · derived D/P, after-tax DRIP
Lump invested today; every dividend it throws off is reinvested.
Annual steps; dividends are paid and reinvested once a year at that year-end price.
Year-1 D/P only — after that, yield is derived, never pinned. The S&P 500 itself yields ≈1.1% (multpl, asOf 2026-06); 3–4% implies a dividend-tilted portfolio.
Growth of dividends per share. S&P 500 long-run ≈5%/yr nominal (multpl).
Separate from dividend growth — if prices outrun dividends, the running yield falls, and reinvested dollars buy fewer shares. That is the honest coupling.
Account type
Roth runs the identical path with zero dividend tax — the gap between the two is your compounding tax drag.
Qualified dividends (61-day holding within the 121-day window, IRS Pub. 550) use LTCG rates; the rest is taxed as ordinary income. REITs and bond funds are mostly non-qualified.
Filing status
Sets the LTCG bracket and the NIIT threshold your dividends stack into.
Sets which LTCG bracket (0/15/20%) the qualified slice stacks into, your marginal ordinary rate, and whether the 3.8% NIIT bites (MAGI over $200k single / $250k MFJ).
100 bps = 1.00%/yr, dragged off the share-price path.
Dividend-cut stress (−30% once)
One-time −30% level cut to dividends per share; growth resumes from the cut level, so the dent is permanent. 2008–2010 realized ≈−24% — the preset is deliberately harsher.
Earlier cuts hurt more — every later year compounds from the dented base.
Set your inputs to project the snowball across low / base / high scenarios.
$—
Portfolio value — Dividend tax paid — ▲ —
Median portfolio value Range (p5–p95) Net annual dividend income
Set your inputs — this rolls a low, base and high growth scenario, reinvests only after-tax dividends, and derives yield as D/P every year. The shaded band is the honest part: the answer is a range, not one number.

Portfolio value range

year-N · p5 · median · p95

Coral = the low-growth 5th-percentile outcome, green = base median, lime = high-growth 95th-percentile. An illustrative scenario spread (dividend growth ∓3pp, price growth ∓4pp), not a measured distribution.

— Yield on cost, final yr *
— Effective dividend tax rate

* Yield on cost is a vanity metric: it divides today's dividend by a price that no longer exists. It measures how long you've held, not the return available on your money today — that is the running D/P in the year-by-year table below.

Methodology & sources
Year-by-year breakdown ›
YrYield D/PGross divTaxReinvestedSharesValue
Adjust the inputs to fill the table.

Base scenario. Yield is the ratio of that year's dividend per share to that year's price — it drifts with your two growth inputs instead of being held fixed.

Show the math ›
Run the projection to see the worked numbers for your inputs.
Assumptions & sources ›
AssumptionValueSource · asOf
Qualified dividends / LTCG brackets 0% ≤ $49,450 · 15% ≤ $545,500 · 20% above (single, taxable income) IRS Rev. Proc. 2025-32 §2.03, tax year 2026 · asOf 2025-10
Non-qualified dividends marginal ordinary brackets (10–37%) IRS Rev. Proc. 2025-32 §2.01 · asOf 2025-10
NIIT 3.8% on lesser of NII or MAGI over $200k/$250k IRC §1411 / Form 8960 — thresholds statutory, not indexed · asOf 2025-10
Standard deduction $16,100 single · $32,200 MFJ IRS Rev. Proc. 2025-32 §2.15 · asOf 2025-10
Market yield anchor S&P 500 ≈1.1% trailing multpl / GuruFocus · asOf 2026-06
Dividend growth anchor ≈5%/yr nominal long-run DPS multpl, S&P 500 dividend growth by year · asOf 2026-06
2008 cut reference ≈−24% DPS peak-to-trough 2008→2010 S&P 500 DPS series (Shiller/multpl) · asOf 2026-06 · stress preset −30% is harsher on purpose
Scenario band div growth ∓3pp · price growth ∓4pp, shifted together illustrative spread, not a measured percentile distribution — sized to the per-decade variation of S&P DPS growth

Simplifications: annual (not quarterly) dividends, reinvested at year-end prices; state tax not modeled; taxes assumed paid from the dividend itself; MAGI treated as constant across years. Federal tax parameters are tax-year 2026 and expire with it — the data gate fails the build when they go stale.

Written by Author to be finalized before launch · Updated 2026-07-06

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