I've read a lot of posts on the 4% rule and have tried many of the calculators posted on this site. With that said, I haven't seen dividends being taken into account in most cases. Are dividends taken into account with the 4% rule?

Let's say I currently spend $50,000 per year in expenses. I make $15,000 per year, after taxes, in dividends. If one currently rolls those dividends back into the fund, it greatly helps their investment portfolio. After retirement, I would assume most people, if needed, would take their dividends as distributions. Just using logic, I would think I could subtract the $15,000, from the $50,000 and then I would need to withdraw $35,000 per year from my investment portfolio.

If I'm thinking about this in the correct manner, then the total investment portfolio does not need to be as large when taking into account dividend distributions.

Any feedback would be appreciated!