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S&P 500 dividend yield falls to record low near 1%

With the index dividend yield near 1%, the article notes retirees may need to compare after-tax dividend income with options such as 10-year Treasurys yielding about 4.65%.

Thursday, August 13, 2026 · Written up by our desk · Sectors

The S&P 500 dividend yield has slid to just above 1%, the lowest level on record, according to Charlie Bilello, chief market strategist at Creative Planning, as investors weigh what income-focused retirees can realistically earn from dividend stocks.

The article attributes the decline in yield not to shrinking payouts, but to a faster climb in stock prices, and says the S&P 500’s market-value weighting has increasingly tilted the index toward megacap tech names that pay little or nothing.

It also points to an example from a retired doctor who built a portfolio around dividend ETFs, splitting a taxable account between dividend funds and S&P 500 index funds, and then adjusted by stopping dividend reinvestment to redirect cash to higher-yield money-market funds or to family.

The piece further argues that once taxes are considered, stock dividends may no longer outperform safer alternatives, using an illustration that $500,000 in a broad index fund could earn about $5,250 per year at the current yield, while the same amount in 10-year Treasurys yielding about 4.65% could generate about $23,250 per year, though high-dividend stocks have still delivered strong total returns over the past year, the article says.

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