Dividend & Interest Calculation - how to

[Steelart99]

So this may seem simplistic ... I'm REing in the next couple of months and need to change my holdings so that dividends and interest are no longer reinvested, but distributed to me as part of our income. I've never done this and I'm not sure how to calculate what that income 'might' be to help in projecting income sources starting next year. I understand that future dividends/interest may not be the same as current rates.

I have VG Total Stock Market Index Fund, so do I just take the number of shares and multiply by the dividend distribution for that quarter? This should be what I could have available as income ... right?

Bond funds: Value of the investment multiplied by the rate of return? Is interest available yearly, or as needed during the year based on performance to date?

I feel a bit like an idiot for asking ...

 

[splitwdw]

I've got a small Vanguard IRA rollover. If you go to "my accounts" then "transaction history" all your account activity is listed. You can break out dividends and interest only, too. Goes back 10 years if you want. Is that what you mean?

 

[MooreBonds]

So this may seem simplistic ... I'm REing in the next couple of months and need to change my holdings so that dividends and interest are no longer reinvested, but distributed to me as part of our income. I've never done this and I'm not sure how to calculate what that income 'might' be to help in projecting income sources starting next year. I understand that future dividends/interest may not be the same as current rates.

I have VG Total Stock Market Index Fund, so do I just take the number of shares and multiply by the dividend distribution for that quarter? This should be what I could have available as income ... right?

Bond funds: Value of the investment multiplied by the rate of return? Is interest available yearly, or as needed during the year based on performance to date?

You have to be careful when dealing with ETFs/CEFs - they dont' always distribute the same each quarter! Not only are there sometimes end-of-year distributions of capital gains, but even the March/June/Sept quarters can vary in distribution, based on the specific fund's policy, and the companies in their indexes (for example, in Europe, it's common to have just 2 distributions a year by many companies).

I love my spreadsheets and have tons of them, so I maintain my portfolio and update the current dividends every 4-6 months. If you don't have a ton of positions, and if you truly want an accurate take on what is 'likely regular dividend' versus capital gain distributions, look at each fund's tax composition. Those qualified dividends will likely be recurring each year, and slowly growing.

However, keep in mind that ETFs distributing short-term capital gains tag them as "non-qualified dividends", so just simply taking the fund's annual dividend distribution may not be accurate, since short-term capital gains are not nearly as 'regular' as regular quarterly/semi-annual dividends. So in a fund's tax summary, I'd suggest looking for last year's qualified dividend total for the year, and then using that as your expectation for each year.

Even looking at a site like Yahoo or even Vanguard's page for that fund is oftentimes not enough, since they usually don't break it down to that degree. You'd have to look at each sponsor's annual tax summary, which lists each fund they have. So while it might take a tiny bit of searching for a few sponsors, once you have that .pdf, it's not much effort to hit "Control-F" to search for the fund's symbol, then see what it's qualified dividends were for 2015.

And with Bond funds - be wary of return-of-capital distributions. If their income isn't enough to sustain the dividend and they are relying on return of capital, your distribution may be under pressure and may be cut in the future.

 

[Steelart99]

I've got a small Vanguard IRA rollover. If you go to "my accounts" then "transaction history" all your account activity is listed. You can break out dividends and interest only, too. Goes back 10 years if you want. Is that what you mean?

Actually, I was just looking for inputs needed to make the calculation for projected future income from dividends and interest. So, yes you are correct; I see the same info that you pointed out ... which does answer the question I had about dividends. I'm still not sure about the interest income. Thanks

 

[LOL!]

For mutual funds, you can just look at the fund web site for the most recent distributions per share and do the calculations. That goes for equity funds like VTSAX/ VTSMX and for bond funds like VBTLX / VBMFX.

Perhaps the only gotcha is that many (but not all) bond funds pay dividends every month while many (but not all) stock funds pay dividends every quarter.

I have found that the December distributions are usually higher than the other months because sometimes there are year-end capital gains.

BTW, you don't need to use the fund web site to get this info. Your browser probably has a search function attached to it such as google, so you can type in something like "VTSAX dividends" and see that one of the top hits will show the dividend.

As already noted, your statements (or your online account) will show the dividends paid, too, whether reinvested or sent to your checking account.

I don't use the "yield" from a bond fund, but look at ACTUAL monthly per share payments. You can see how they vary and are not constant.

 

[Steelart99]

You have to be careful when dealing with ETFs/CEFs - they dont' always distribute the same each quarter! Not only are there sometimes end-of-year distributions of capital gains, but even the March/June/Sept quarters can vary in distribution, based on the specific fund's policy, and the companies in their indexes (for example, in Europe, it's common to have just 2 distributions a year by many companies).

I love my spreadsheets and have tons of them, so I maintain my portfolio and update the current dividends every 4-6 months. If you don't have a ton of positions, and if you truly want an accurate take on what is 'likely regular dividend' versus capital gain distributions, look at each fund's tax composition. Those qualified dividends will likely be recurring each year, and slowly growing.

However, keep in mind that ETFs distributing short-term capital gains tag them as "non-qualified dividends", so just simply taking the fund's annual dividend distribution may not be accurate, since short-term capital gains are not nearly as 'regular' as regular quarterly/semi-annual dividends. So in a fund's tax summary, I'd suggest looking for last year's qualified dividend total for the year, and then using that as your expectation for each year.

Even looking at a site like Yahoo or even Vanguard's page for that fund is oftentimes not enough, since they usually don't break it down to that degree. You'd have to look at each sponsor's annual tax summary, which lists each fund they have. So while it might take a tiny bit of searching for a few sponsors, once you have that .pdf, it's not much effort to hit "Control-F" to search for the fund's symbol, then see what it's qualified dividends were for 2015.

And with Bond funds - be wary of return-of-capital distributions. If their income isn't enough to sustain the dividend and they are relying on return of capital, your distribution may be under pressure and may be cut in the future.

WHAT!!! I'm not the only one with tons of spreadsheets!!!

I've not been tracking the various dividend / interest distributions, just letting them roll over as reinvestments. So, your point is taken that I just need to lay out the funds and the various dividends (qualified and non-qualified), interest and CGs. Should provide a reasonable projection of future income assuming I grab the right info.

Thanks

 

[LOL!]

I don't do spreadsheets, but I have the free MS Money that can generate reports over any time period for distributions paid to me. Easier than a spreadsheet and much more versatile.

 

[Steelart99]

I don't do spreadsheets, but I have the free MS Money that can generate reports over any time period for distributions paid to me. Easier than a spreadsheet and much more versatile.

I've never used MS Money ... gonna have to go find my free copy

 

[pb4uski]

Why not just look at what they distributed in 2015 or for the last 12 months as a reasonable approximation? Should be able to get it from your brokerage statements or tax return. Only difference is that you'll now be taking them in cash rather than reinvesting.

 

[Sunset]

Why not just look at what they distributed in 2015 or for the last 12 months as a reasonable approximation? Should be able to get it from your brokerage statements or tax return. Only difference is that you'll now be taking them in cash rather than reinvesting.

+1
Especially since the economic situation of the companies/country will be different than right now, so all you are going to get is an approximation.

 

[scrabbler1]

The mutual fund company's website will have monthly dividends per share going back a few months. However, you can call them up, as I did years ago when I was building a longer history, to get several years of monthly dividends per share. I have found that the daily price (NAV) of a bond fund doesn't matter much when predicting future dividend income, only the monthly DPS and the number of shares I own. I have been doing this since I ERed 8 years ago.

 

[Texas Proud]

I do not know about others, but in Vanguard you can go to My Accounts - Dividends and Capital Gains...

It lists all for YTD and last year when you make the selection... and below it gives the amounts by account....



What I did was change my investment options to have all of them invested in my ST bond fund.... and I just take money out of that for spending... at times it gets low and I sell a fund to fill it back up...

 

[mathjak107]

our fund distributions run between 29k and 69k in any given year . we do not live off that flow directly . we accumulate it in a bucket for the following years spending .

when the fund distributions vary so much it becomes a hassle to make up shortfalls on the fly . we find we are better off keeping the current year funded in cash and fill up the 2nd year where we have time to think about how we want to fill short falls

 

[davismills]

I like this dividend calculator. Divicalc - a dead simple dividend and return calculator.

 

[Steelart99]

I like this dividend calculator. Divicalc - a dead simple dividend and return calculator.

I like this calculator! Thanks

 

[Steelart99]

The mutual fund company's website will have monthly dividends per share going back a few months. However, you can call them up, as I did years ago when I was building a longer history, to get several years of monthly dividends per share. I have found that the daily price (NAV) of a bond fund doesn't matter much when predicting future dividend income, only the monthly DPS and the number of shares I own. I have been doing this since I ERed 8 years ago.

I could get the performance from my VG accounts, but I have company 401K funds that don't provide the dividend performance on-line and there is no fund 'symbol' to look up. It seems like I may have to ping them directly to try to get the past performance. Thanks

 

[MooreBonds]

I could get the performance from my VG accounts, but I have company 401K funds that don't provide the dividend performance on-line and there is no fund 'symbol' to look up. It seems like I may have to ping them directly to try to get the past performance. Thanks

Since you are a fellow spreadsheet addict, you should be willing to consider this work-around: look at the top-10 holdings (or top 20/30 holdings) of those 401k funds, if they constitute, say, 30%-60% of the fund. If it's a hugely diversified fund, it may not be possible, but if just 10-30 stocks make up a majority of the assets, simply make your own estimate of the annual recurring dividends by entering those 10-30 symbols into a spreadsheet, and compute your own estimate of the annual distributions based on the top 10-30 symbols' annual distributions...which should approximate a good % of the total fund. Then, just apply a reasonable, conservative estimate of yield of the remaining % holdings in that 401k fund (I'd assume maybe a 1%-1.5% average yield of the remaining stocks, as long as it's not something like a tech fund or some other sector that doesn't pay a high average level of dividends).

 

[Steelart99]

Since you are a fellow spreadsheet addict, you should be willing to consider this work-around: look at the top-10 holdings (or top 20/30 holdings) of those 401k funds, if they constitute, say, 30%-60% of the fund. If it's a hugely diversified fund, it may not be possible, but if just 10-30 stocks make up a majority of the assets, simply make your own estimate of the annual recurring dividends by entering those 10-30 symbols into a spreadsheet, and compute your own estimate of the annual distributions based on the top 10-30 symbols' annual distributions...which should approximate a good % of the total fund. Then, just apply a reasonable, conservative estimate of yield of the remaining % holdings in that 401k fund (I'd assume maybe a 1%-1.5% average yield of the remaining stocks, as long as it's not something like a tech fund or some other sector that doesn't pay a high average level of dividends).

Hmmmm... that sounds like a good plan! Thanks

 

[target2019]

I could get the performance from my VG accounts, but I have company 401K funds that don't provide the dividend performance on-line and there is no fund 'symbol' to look up. It seems like I may have to ping them directly to try to get the past performance. Thanks

The 401k funds may not distribute dividends directly. At least mine don't.

You can use a proxy symbol for the investment, and look that up on Divicalc, etc. Then estimate the yearly dividend, and withdraw a similar amount.

 

[RetireAge50]

Why not just let them continue to be reinvested and then just withdraw as needed (but selling shares)?

 

[scrabbler1]

Why not just let them continue to be reinvested and then just withdraw as needed (but selling shares)?

One reason I take my dividends in cash instead of reinvesting them then selling shares to raise the equivalent cash is it makes my tax forms a lot easier. One year, I made no sales of shares and was able to avoid filing a Schedule D altogether. So far this year I have made no sales of shares so if I can keep that up I will again avoid filing Schedule D and Form 8949.

 

[RetireAge50]

One reason I take my dividends in cash instead of reinvesting them then selling shares to raise the equivalent cash is it makes my tax forms a lot easier. One year, I made no sales of shares and was able to avoid filing a Schedule D altogether. So far this year I have made no sales of shares so if I can keep that up I will again avoid filing Schedule D and Form 8949.

Makes sense. Thanks.