What does income coverage mean?
Income coverage happens when projected annual dividend income is at least equal to twelve months of your current debt payment.
Prospyr calculator
Debt Freedom Engine
Compare debt-first, invest-first, and hybrid strategies to see when dividend income can cover your debt payment before the debt is fully paid off.
Inputs
Outputs update as you type. Switching modes keeps your numbers intact.
Recommended path
Invest-first
This strategy reaches income coverage in 12.1 yrs and debt freedom in 22.0 yrs.
Debt payment target
$19,200/yr
Adjusted yield
4.5%
Debt-first
Income coverage15.4 yrs
Debt free12.0 yrs
Final portfolio$2,379,528
Monthly income$21,659
Extra cash split: $750/mo to debt and $0/mo to investing.
Invest-first
BestIncome coverage12.1 yrs
Debt free22.0 yrs
Final portfolio$2,708,680
Monthly income$24,655
Extra cash split: $0/mo to debt and $750/mo to investing.
Hybrid
Income coverage14.7 yrs
Debt free15.4 yrs
Final portfolio$2,499,180
Monthly income$22,748
Extra cash split: $375/mo to debt and $375/mo to investing.
30-year strategy table
Year-by-year checkpoints for debt balance, portfolio value, income, and coverage.
| Year | Strategy | Debt | Portfolio | Annual Income | Coverage |
|---|---|---|---|---|---|
| Now | Invest-first | $250,000 | $50,000 | $2,250 | 0x |
| Year 5 | Invest-first | $215,351 | $123,978 | $6,468 | 0x |
| Year 10 | Invest-first | $170,328 | $236,009 | $14,273 | 1x |
| Year 13 | Invest-first | $137,077 | $333,289 | $22,025 | 1x |
| Year 14 | Invest-first | $124,781 | $372,869 | $25,380 | 1x |
| Year 15 | Invest-first | $111,823 | $416,862 | $29,226 | 2x |
| Year 16 | Invest-first | $98,168 | $465,887 | $33,643 | 2x |
| Year 17 | Invest-first | $83,779 | $520,669 | $38,726 | 2x |
| Year 18 | Invest-first | $68,616 | $582,049 | $44,591 | 2x |
| Year 19 | Invest-first | $52,638 | $651,010 | $51,370 | 3x |
| Year 20 | Invest-first | $35,800 | $728,703 | $59,225 | 3x |
| Year 21 | Invest-first | $18,056 | $816,479 | $68,350 | 4x |
This calculator is for informational purposes only and does not constitute licensed financial advice. Always verify debt terms and pricing data with your lender before making financial decisions.
Why compare three strategies?
Debt-first reduces interest drag fastest. Invest-first builds income fastest. Hybrid tries to balance both pressures in one plan.
How should I use this?
Treat the result as a planning lens. Small changes in rates, payment terms, dividend cuts, or tax treatment can change the best path.
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Freshness and methodology
Last reviewed
April 2026 with 2026 CRA planning inputs.
Methodology
Debt payoff projections use standard amortization, monthly extra-cash allocation, DRIP-style reinvestment assumptions, account-type yield adjustments, and a 30-year income coverage milestone window.
Updated for 2026 CRA limits · Last verified April 2026
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