When can you retire on dividends?
See how much dividend income your portfolio could produce at retirement. Three projections (Bear, Base, Bull) plus a probability-weighted average, for UK ISA / SIPP / GIA and State Pension, or US 401(k) / IRA / Brokerage and Social Security. Numbers stay in your browser.
FIRE number
£900K
Base · age 55
£2,626.89/mo
Your numbers
Adjust the inputs and every output below recalculates instantly.
SIPP access from age 55
FTSE All-World ≈ 8% p.a. over 30 years (nominal).
Typical dividend-focused portfolio: 3–5%.
Enter in today's GBP. The calculator works in real terms, so your expected return assumption should already be net of inflation (so 7% nominal − 3% inflation ≈ 4% real if you'd rather think in nominal terms).
Off = dividends taken as income from day 1; on = compounded into the portfolio.
UK tax wrappers
Allocate your monthly contributions across ISA, SIPP, and any leftover General Investment Account (GIA).
Tax-free growth and tax-free dividend income. £20,000/yr cap.
£60,000/yr cap. Income-tax relief in, taxable on drawdown.
Remaining 0% flows to a General Investment Account (GIA). Dividend allowance £500/yr.
State Pension supplements your portfolio income from age 67 onwards.
2026/27 full new State Pension is £241.30. Check your forecast at gov.uk.
Currently rising 66 → 67 through 2026/27; legislated to rise to 68 from 2044.
25% tax-free lump sum
At retirement, take up to 25% of your SIPP tax-free (Pension Commencement Lump Sum). Capped at the £268,275 Lump Sum Allowance.
Off = leave the SIPP fully invested; income is calculated on the whole pot.
Stays earning at your dividend yield, in a taxable wrapper.
Removed from portfolio. Adjust your target income to reflect lower outgoings.
One-off withdrawal: holiday, gift, peace of mind.
Property & other assets
Tracked alongside your portfolio for net worth. Main residence doesn’t feed FIRE income (you have to live somewhere); buy-to-let rental income does.
Today's value minus outstanding mortgage.
UK long-run average ≈ 2–3% real.
Net of any mortgage outstanding on the rental property.
After agency fees, maintenance, void allowance: what actually lands in your account.
Business equity, cash, collectibles. Net worth display only.
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Your FIRE number
£900K
Portfolio needed at age 55 to throw off £3,000.00/mo at 4.0% yield, your full target until State Pension starts.
Phase 1 · bridge years
12 yearsAge 55 → 67
- From portfolio dividends£3,000.00
- From State Pension£0.00
- Total monthly£3,000.00
Phase 2 · State Pension on
for lifeAge 67+
- From portfolio dividends£1,954.37
- From State Pension£1,045.63
- Total monthly£3,000.00
25% tax-free lump sum (Base scenario)
£39.4K
25% of your projected SIPP value at age 55, capped at the Lump Sum Allowance (£268,275). Tax-free.
Reinvested in GIA
£39.4K
To mortgage / debt
£0
Cash for spending
£0
Income breakdown
Where your monthly income comes from at age 55, Base scenario.
Total monthly
£3,672.52
vs your £3,000.00 target: +£672.52.
- £2,101.51
ISA dividends
Tax-free: no income tax on dividends or growth.
- £525.38
SIPP dividends
Drawdown counts as income. 25% tax-free lump sum already applied.
- £0.00
GIA dividends
First £500/yr covered by the dividend allowance.
- £1,045.63
State Pension
2026/27 full new State Pension is £241.30/wk, taxable income.
Tax notes are informational. This is not financial or tax advice.
Portfolio projection
Bear / Base / Bull paths from now until age 55.
- Bear Base Bull
Bear = base return − 2pp / yield − 1pp. Bull = base return + 2pp / yield + 1pp. Probability weights 25 / 50 / 25%.
Scenario summary
What each scenario looks like at retirement.
| MetricAt age 55 | BearAge 55 | BaseAge 55 | BullAge 55 | Weighted avgAge 55 |
|---|---|---|---|---|
| Portfolio at retirement | £475.5K | £788.1K | £1.3M | £849.9K |
| Annual dividend income | £14.3K | £31.5K | £67.4K | £36.2K |
| Monthly dividend income | £1,188.78 | £2,626.89 | £5,616.31 | £3,014.72 |
| vs your target | −£1,811.22 | −£373.11 | +£2,616.31 | +£14.72 |
| Years to FIRE number | 33.0 yrs · age 63 | 27.0 yrs · age 57 | 23.0 yrs · age 53 | 27.5 yrs · age 58 |
How to close the gap
Base scenario falls short of your target by £373.11/mo. Pull one of these levers to close it.
If the calculator changed how you think about wrapper mix, these three guides are the best next reads before you make the income plan more concrete.
Read next
- UK Dividend Tax Guide 2026/27 The allowance, band, and wrapper rules that shape what you actually keep.
- Dividend Income in Retirement: tax and planning Turn the calculator's gross income output into a more realistic after-tax retirement plan.
- Retirement Income Calculator Guide What each scenario means, how Bear, Base, and Bull projections work, and how to apply them to your portfolio.
This is not financial or tax advice. Calculations are for illustration only and rely on inputs and assumptions you control. Tax rules and contribution limits change, so verify against current gov.uk guidance before making decisions.