What Is a JEPI Calculator
A JEPI dividend calculator takes inputs like initial portfolio value, annual contributions, and uses pre-set data on the popular JPMorgan Equity Premium Income ETF. It then provides calculations and projections on your portfolio's expected performance over a specified period.
This differs from a standard compound interest calculator as it considers specific details related to dividend stocks, such as annual dividend yield, compound dividend growth rate, payout frequency, and dividend tax rate. It also provides additional dividend-specific metrics, including yield on cost, annual dividend earnings, and lifetime dividend earnings.
How To Use the Infinity Calculator JEPI Dividend Calculator
Our dividend reinvestment calculator is simple to use, requiring only basic information about your dividend portfolio to get started.
Step 1: Enter Dividend Portfolio Information
First, you need to enter the requested information into our calculator. We will provide a brief description of all the requested information below:
Starting Principal: The starting principal is the current value of the shares in your dividend portfolio. For example, if you have a dividend portfolio that has $150,000 in stocks and $25,000 in cash, you would enter $150,000 as your starting principal.
Annual Contribution: The annual contribution is the amount of cash you will invest in dividend stocks each year in your portfolio. We don't count the cash that you add to your dividend portfolio that is left uninvested. For example, if you add $20,000 into your portfolio each year but only invest $15,000 of it, your annual contribution would be $15,000. Our calculator assumes you invest your contribution by dollar cost averaging into the market once at the end of each year.
Annual Dividend Yield: The annual dividend yield is the percentage of the dividend stock's value you receive back each year in the form of dividend payments. For example, if you had a stock with a value of $10 that makes a dividend payment of $1 per year, your dividend yield would be \left( \frac{1}{10} \right) \times 100 = 10\%. We have pre-filled 7.37% as the trailing 12-month dividend yield for JEPI based on our calculations.
Dividend Growth Rate: The dividend growth rate is the compounded percentage increase of the dividends paid per share of your portfolio over the last five years. You can find this number on most stock analysis websites, but we always get our dividend growth rate information from Seeking Alpha. We have pre-filled 0% as the 5-year trailing compound annual dividend growth rate for JEPI based on our calculations.
Annual Share Price Growth: Annual share price growth is the expected capital gains per year expressed in a percentage. You can use a historical figure as a baseline for your portfolio or the market average for your specific sector. We have pre-filled 3.84% as the average compound share price growth rate for JEPI based on our calculations.
Number of Years: The number of years you want our calculator to model your portfolio performance.
Maximum Dividend Yield: The maximum dividend yield you want our calculator to allow. This only comes into play when your dividend growth rate is set higher than your annual share price growth rate.
Reinvest Dividends: This toggle tells our dividend calculator whether you want to reinvest dividends through a program like DRIP or withdraw them for income.
Payout Frequency: The payout frequency or dividend distribution frequency is how often your dividend stocks pay out dividends. Most stocks pay quarterly, but some pay monthly, semiannually, and annually. This affects how often your portfolio will compound. Usually, a more frequent dividend payment will allow your portfolio to grow quicker than one with a less frequent payment when all other factors are the same.
Step 2: Enter Dividend Tax Information
Next, enter information related to how dividends earned by your portfolio will be taxed. If your portfolio is in a tax-sheltered account like a 401(k), TFSA, or RRSP, you can leave this section blank.
Dividend Tax Rate: The average tax rate you will be charged on your dividend income. This is different than your marginal tax rate. You can find your average tax rate using a tax calculator for your region.
Tax Free Dividend Income Allowed: The amount of dividends you can earn before you are taxed. For example, if you have an exemption of $10,000 and you earn $20,000 in annual dividend income, we will only calculate taxes on 20,000 - 10,000 = 10,000 of income.
Step 3: Analyze Data
Once you have entered your dividend portfolio information into the dividend calculator, you will be presented with information related to your portfolio along with a chart to visualize this data. We will provide a brief description of all the information below:
Ending Balance: The ending balance is your portfolio value at the end of your simulation. This value accounts for all capital gains, reinvested dividends, and annual contributions.
Total Return: The total return is the percentage increase between your ending balance and the amount of cash you contributed to your portfolio.
Average Annual Return: The average annual return is calculated by dividing the total return by the number of years over the term of your simulated portfolio. It gives you a good understanding of the expected percentage return you can expect to get based on your inputted data.
Ending Annual Dividend Income: The annual dividend income you should expect to receive after your investment period. This takes into account your dividend growth rate and dividend reinvestment.
Total Dividend Payments: Total dividend payments are the total amount of dividends earned during your investment period.
Yield on Cost: Yield on cost is calculated by dividing your total annual dividend income at the end of the investment period by your total cash contributions. It is typically higher than the current dividend yield, assuming the portfolio has a positive dividend growth rate.