Quick Read – A $1M portfolio anchored by O and SCHD generates ~$43,770 annually but surrenders $7,515 to taxes at the 24% bracket. – That $7,515 annual Roth advantage reinvested at 4% compounds to ~$225,000 over 20 years, which represents the permanent cost of wrong account…
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At the 24% federal bracket, a $1 million dividend portfolio generating roughly $45,000 in annual income can hand the IRS between $6,750 and $10,800 every year, depending on how much of that income is qualified versus ordinary. Inside a Roth IRA, that same income lands in your account untouched. This article walks through exactly what that delta looks like on six named holdings using verified 2026 federal brackets and current yields.
The $1 Million Portfolio and Its Blended Yield Here is the construction: Six holdings, allocated to produce a realistic blended yield in the 4% to 5% range, weighted toward income generation rather than growth. For the example portfolio above, the gross annual income is approximately $43,770. Of that, roughly $10,540 from Realty Income flows through as ordinary income, while the remaining $33,230 from the other five holdings qualifies for long-term capital gains rates.