A $2 million dividend portfolio yields $95,500 gross but nets $89,370 after California taxes and Medicare surcharges.
A $2 million dividend portfolio combining SCHD, JEPI, and VNQ generates $95,500 in gross annual income for a California retiree. After state taxes and deductions, take-home pay drops to approximately $89,370.
The portfolio allocates 60% to dividend-growth equities, 25% to covered-call funds, and 15% to REITs. Federal tax exemptions on $42,000 of qualified dividends and strategic IRA placement help avoid a $81 monthly Medicare surcharge by keeping MAGI below $218,000.
Tax treatment and healthcare costs reduce the net income, highlighting the gap between gross yield and spendable cash for retirees.