How does the Dividend vs Growth ETF Calculator work?

Compares two ways to live off a portfolio: hold a dividend ETF and spend its dividends, or hold a growth ETF and sell shares for the same paycheck. Both portfolios start with the same money, get the same contributions and pay you the same amount after tax every month. The tool shows which one ends with more, after tax, and how much tax each paid along the way.

How do I use the Dividend vs Growth ETF Calculator?

Set your starting balance, monthly contribution, years until income and years of income. Give each fund a total return and a dividend yield (equal returns by default, so the comparison shows the effect of tax alone). Pick Taxable or Tax-sheltered and your rate on dividends and long-term gains. Advanced Options holds the two expense ratios and inflation.

What are the key concepts behind the Dividend vs Growth ETF Calculator?

A dividend is not extra return: it comes out of the fund's price. With no tax and equal total returns, spending dividends and selling shares leave you exactly as well off. Tax breaks the tie. Dividends are taxed every year, even when you reinvest them, while a growth fund's gains are taxed only when you sell, and only the gain part of each sale. Dividends grow with the fund's price, so there is no separate dividend growth input.

What tips help me get the most out of the Dividend vs Growth ETF Calculator?

Switch to Tax-sheltered and give both funds the same expense ratio: the two lines become one, which is the proof that the rest of the difference is tax. Raise the dividend ETF's total return to see how much extra return it needs to catch up. The growth ETF's withdrawal rate under the paycheck tells you how the dividend paycheck compares with the 4% rule. Heirs may get a stepped-up basis, so for money you plan to leave, compare the before-tax balances.

Dividend vs Growth ETF Calculator

Live off a dividend ETF, or sell shares of a growth ETF? Both pay the same monthly paycheck here. See which one leaves you more after dividend and capital gains tax.

Starting Balance$50,000

What you'd invest today. Both portfolios start with the same amount.

Monthly Contribution$1,000

Added to both portfolios every month until income starts.

Years Until Income20 yr

How long you keep building before you live off the portfolio. 0 starts the paycheck today.

Years of Income30 yr

How many years you draw the paycheck. 30 covers a retirement from 60 to 90.

Growth ETF

Total Return %8%

Price growth plus dividends, per year, before fees. Equal to the dividend ETF by default so the comparison isolates tax.

Dividend Yield %1.3%

Dividends per year as a share of the price. Broad-market index funds pay roughly 1 to 1.5%.

Dividend ETF

Total Return %8%

Price growth plus dividends, per year, before fees. A higher yield is not a higher return: the dividend comes out of the price.

Dividend Yield %3.5%

Dividends per year as a share of the price. High-dividend index funds pay roughly 3 to 4%. Dividends grow with the fund's price.

Account

Tax on Dividends and Gains %15%

Your rate on qualified dividends and long-term gains, federal plus state. Federal is 0, 15 or 20% depending on income.

Growth ETF Expense Ratio %0.03%

The fund's yearly fee. Broad index funds charge about 0.03%.

Dividend ETF Expense Ratio %0.06%

The fund's yearly fee. Index dividend funds charge about 0.06%; active income funds far more.

Inflation %3%

Used only for the today's dollars view. It doesn't change which fund comes out ahead.

Showing today's dollars, adjusted for 3% inflation

Same paycheck, starting at $1,053 a month, for 30 years. The Growth ETF ends with $109,806 more after tax and paid $23,866 less tax along the way.

Monthly paycheck, first year

$1,053

after tax. For the Growth ETF that's 2.9% of its balance a year, after tax.

Growth ETF at the end

$688,530

after tax, if you sold everything

Dividend ETF at the end

$578,724

after tax, if you sold everything

stwlth.com

Balance before tax. Income starts in year 20.

Growth ETFDividend ETF

Balance before tax. Income starts in year 20.
Period	Growth ETF	Dividend ETF
Yr 0	$50K	$50K
Yr 1	$65K	$64K
Yr 2	$79K	$79K
Yr 3	$95K	$94K
Yr 4	$110K	$109K
Yr 5	$127K	$125K
Yr 6	$143K	$141K
Yr 7	$160K	$157K
Yr 8	$178K	$174K
Yr 9	$196K	$192K
Yr 10	$215K	$210K
Yr 11	$235K	$228K
Yr 12	$255K	$247K
Yr 13	$276K	$267K
Yr 14	$298K	$287K
Yr 15	$320K	$308K
Yr 16	$344K	$330K
Yr 17	$368K	$352K
Yr 18	$394K	$376K
Yr 19	$420K	$400K
Yr 20	$448K	$425K
Yr 21	$456K	$431K
Yr 22	$464K	$438K
Yr 23	$473K	$444K
Yr 24	$482K	$451K
Yr 25	$491K	$457K
Yr 26	$500K	$464K
Yr 27	$509K	$471K
Yr 28	$519K	$478K
Yr 29	$529K	$485K
Yr 30	$539K	$492K
Yr 31	$549K	$500K
Yr 32	$559K	$507K
Yr 33	$570K	$515K
Yr 34	$581K	$522K
Yr 35	$592K	$530K
Yr 36	$604K	$538K
Yr 37	$615K	$546K
Yr 38	$628K	$554K
Yr 39	$640K	$562K
Yr 40	$653K	$571K
Yr 41	$666K	$579K
Yr 42	$679K	$588K
Yr 43	$693K	$597K
Yr 44	$707K	$605K
Yr 45	$722K	$614K
Yr 46	$737K	$624K
Yr 47	$752K	$633K
Yr 48	$768K	$642K
Yr 49	$785K	$652K
Yr 50	$801K	$661K

Tax paid along the way

Growth ETF$81,468

$8,656 while building, $72,812 while drawing income

Dividend ETF$105,334

$22,541 while building, $82,793 while drawing income

While buildingFund color: while drawing income

Year by year

Year	Phase	Growth ETF	Dividend ETF	Paycheck: dividend	Paycheck: growth	Tax: growth	Tax: dividend
0	Start	$50,000	$50,000	—	—	$0	$0
1	Building	$64,530	$64,323	—	—	$109	$292
2	Building	$79,422	$78,944	—	—	$137	$367
3	Building	$94,704	$93,888	—	—	$166	$443
4	Building	$110,405	$109,179	—	—	$196	$521
5	Building	$126,555	$124,842	—	—	$226	$601
6	Building	$143,186	$140,903	—	—	$257	$683
7	Building	$160,330	$157,390	—	—	$290	$767
8	Building	$178,021	$174,331	—	—	$323	$853
9	Building	$196,295	$191,756	—	—	$358	$942
10	Building	$215,189	$209,693	—	—	$393	$1,033
11	Building	$234,741	$228,175	—	—	$430	$1,127
12	Building	$254,992	$247,234	—	—	$468	$1,224
13	Building	$275,983	$266,904	—	—	$508	$1,324
14	Building	$297,759	$287,220	—	—	$549	$1,427
15	Building	$320,364	$308,218	—	—	$591	$1,534
16	Building	$343,847	$329,937	—	—	$635	$1,644
17	Building	$368,257	$352,415	—	—	$681	$1,758
18	Building	$393,647	$375,695	—	—	$729	$1,876
19	Building	$420,071	$399,818	—	—	$779	$1,998
20	Building	$447,586	$424,829	—	—	$830	$2,125
21	Income	$455,858	$431,146	$12,523	$12,523	$1,573	$2,210
22	Income	$464,295	$437,556	$12,710	$12,710	$1,636	$2,243
23	Income	$472,902	$444,062	$12,899	$12,899	$1,699	$2,276
24	Income	$481,686	$450,665	$13,090	$13,090	$1,761	$2,310
25	Income	$490,653	$457,365	$13,285	$13,285	$1,823	$2,344
26	Income	$499,812	$464,166	$13,482	$13,482	$1,883	$2,379
27	Income	$509,168	$471,067	$13,683	$13,683	$1,943	$2,415
28	Income	$518,731	$478,072	$13,886	$13,886	$2,003	$2,451
29	Income	$528,508	$485,180	$14,093	$14,093	$2,061	$2,487
30	Income	$538,506	$492,394	$14,302	$14,302	$2,120	$2,524
31	Income	$548,736	$499,715	$14,515	$14,515	$2,178	$2,561
32	Income	$559,205	$507,145	$14,731	$14,731	$2,235	$2,600
33	Income	$569,923	$514,686	$14,950	$14,950	$2,293	$2,638
34	Income	$580,899	$522,339	$15,172	$15,172	$2,350	$2,677
35	Income	$592,144	$530,105	$15,398	$15,398	$2,406	$2,717
36	Income	$603,669	$537,987	$15,627	$15,627	$2,463	$2,758
37	Income	$615,483	$545,986	$15,859	$15,859	$2,519	$2,799
38	Income	$627,599	$554,104	$16,095	$16,095	$2,575	$2,840
39	Income	$640,028	$562,343	$16,334	$16,334	$2,631	$2,883
40	Income	$652,782	$570,705	$16,577	$16,577	$2,687	$2,925
41	Income	$665,876	$579,190	$16,824	$16,824	$2,743	$2,969
42	Income	$679,321	$587,802	$17,074	$17,074	$2,799	$3,013
43	Income	$693,132	$596,542	$17,328	$17,328	$2,856	$3,058
44	Income	$707,324	$605,412	$17,585	$17,585	$2,912	$3,103
45	Income	$721,913	$614,413	$17,847	$17,847	$2,968	$3,149
46	Income	$736,914	$623,549	$18,112	$18,112	$3,025	$3,196
47	Income	$752,343	$632,820	$18,381	$18,381	$3,082	$3,244
48	Income	$768,220	$642,230	$18,655	$18,655	$3,139	$3,292
49	Income	$784,561	$651,779	$18,932	$18,932	$3,196	$3,341
50	Income	$801,386	$661,470	$19,214	$19,214	$3,253	$3,391

Balances are before tax. The Growth ETF pays the same paycheck as the Dividend ETF.

How this is worked out

While building, both funds reinvest their dividends after tax. In a taxable account the dividend ETF pays more tax every year, because more of its return arrives as dividends.
While drawing income, the dividend ETF pays you its dividends. The growth ETF pays you the same amount after tax: its own dividends first, then shares sold. Only the gain part of a sale is taxed.
The end values are after tax, as if you sold everything. Heirs may get a stepped-up basis, which erases the unrealized gain; then the before-tax balance in the chart is the fair number.
One flat rate covers qualified dividends and long-term gains. No net investment income tax, state brackets, required minimum distributions or non-qualified dividends. Losses get no tax credit.
Returns, yields and fees stay constant; growth compounds monthly. Cost basis is the average cost. Defaults are illustrative, not quotes for any fund.

Estimation only. Illustrative returns and yields, not quotes for any fund. Not tax advice. Not financial advice.

Built by Stwlth Software. We build tools like this for clients.