SCHD Dividend Calculator

It has generally sat between roughly 3% and 4% since the fund launched in 2011, moving inversely with price — when the share price falls the yield rises, and vice versa. The default here is a reasonable recent figure rather than a live quote, so set it to whatever the fund is actually yielding on the day you use it. Deliberately not pulling a live price keeps the page from quietly going stale, and the date the defaults were taken is shown next to the price field.

SCHD's dividend grew at roughly 11% a year over its first decade, which is unusually strong and reflects a particular period for US dividend payers. Assuming that continues for another twenty years is optimistic. The default here is deliberately more conservative, and it is worth running the projection at 3% or 4% as well — the gap between those two runs is usually larger than people expect, because the growth rate compounds against a share count that is itself compounding.

Yield on cost measures the income against what you originally paid, not against what the shares are worth now. If you buy at a 4% yield and the dividend per share doubles over a decade, you are earning 8% on your original money, even though a new buyer still only gets 4%. It is a useful way to see the effect of dividend growth, but it is not comparable to the yield a new investor would get, and a high yield on cost does not by itself mean the holding is a good one today.

Over five years, not much — usually a few percent. Over twenty or thirty it tends to dominate the result, because reinvested shares earn distributions that buy further shares. Toggle reinvestment off and on with a long horizon set and the gap is usually the single largest number on the page. The catch is that reinvesting in a taxable account still leaves you owing tax on income you never received in cash, which is exactly what the tax panel models.

SCHD's distributions are essentially all qualified dividends, which means US investors pay long-term capital gains rates — 0%, 15% or 20% depending on taxable income — rather than ordinary income rates, plus the 3.8% net investment income tax above $200,000 single or $250,000 married filing jointly. That favourable treatment is one of the real arguments for a fund like this over a covered-call fund with a higher headline yield. Switch the account type to a Roth or traditional IRA and the annual drag disappears from the projection entirely.

Because SCHD pays quarterly, in March, June, September and December. An annual model understates the result, since each quarter's reinvestment starts earning three months sooner than a single year-end payment would. The difference is small in any one year and meaningful across thirty. The year-by-year table still shows one row per year, so the extra precision does not cost you any readability.