VYM Dividend Calculator

Breadth, mostly. VYM holds several hundred US companies, selected simply by forecasting above-average yield and weighting by market capitalisation — it is a wide, shallow net. SCHD screens far more aggressively on quality metrics like return on equity and dividend consistency, and holds around a hundred names. In practice VYM tends to yield slightly less, grow its dividend slightly slower, and behave more like the broad market; SCHD is more concentrated and more of a bet on a particular definition of dividend quality. Neither is the obvious winner, and running both here with identical inputs is a cleaner comparison than reading either fund's marketing.

The default is 5%, which sits roughly in line with its long-run record and a little below the broad market's dividend growth. Because VYM is weighted toward mature, higher-yielding companies, it does not tend to produce the double-digit payout growth of a dividend-growth-focused screen — the trade is more income now for less growth later. If you are projecting decades out, running the calculation at 3% as well is a useful reality check, because the difference between 3% and 5% over thirty years is very large.

Yes, on the usual March, June, September and December cycle, and the amounts vary between quarters — the December distribution is often the largest. This calculator spreads the annual figure evenly across four payments and compounds on that schedule, which is a fair approximation for projection purposes even though the real payments are lumpier.

Essentially all of it is qualified dividend income, so US investors face 0%, 15% or 20% depending on taxable income, plus the 3.8% net investment income tax above $200,000 single or $250,000 married filing jointly. This is the ordinary, favourable case — unlike a covered-call fund, there is no ordinary-income surprise buried in the distribution. Use the account type selector to see how much of that drag disappears inside an IRA.

It is one of the more defensible options, in the sense that it is cheap, diversified across hundreds of companies, and not doing anything structurally clever that could go wrong. What it will not do is generate a large income on a modest balance: at roughly 2.7%, funding $30,000 a year of dividends takes north of a million dollars invested. Set the contribution slider to whatever you can actually save each month and the calculator will show you how long that takes at your assumptions, which is usually a more sobering exercise than people expect.

Because yield on cost measures today's income against yesterday's price. If the dividend per share grows 5% a year and you paid a fixed amount, your income relative to that original outlay rises every year even though the fund's current yield stays around 2.7% for anyone buying now. With reinvestment on, the effect compounds further because the share count is rising too. It is a genuine measure of how a long hold has performed for you, but it says nothing about whether the fund is attractive to buy today.