SWP Calculator
Plan a steady income stream from your investments for retirement. See how long your money will last with our Systematic Withdrawal Plan (SWP) calculator.
How to Use Our SWP Calculator
Our tool helps you model your post-retirement cash flow. Just enter:
- Total Investment: The initial lump sum amount you've accumulated.
- Withdrawal Per Month: The fixed amount you wish to receive every month.
- Expected Return Rate (%): The annual return you anticipate your remaining corpus will generate.
The calculator will project how long your corpus can sustain these withdrawals, showing you the year-by-year balance.
What is a Systematic Withdrawal Plan (SWP)?
A Systematic Withdrawal Plan (SWP) is a smart way to generate a regular income from your mutual fund investments. It is the exact opposite of a Systematic Investment Plan (SIP). Instead of investing periodically, you withdraw a fixed amount at regular intervals (usually monthly). This strategy allows your remaining capital to stay invested and potentially grow, making it a cornerstone of modern retirement planning.
Benefits of an SWP for Financial Planning
- Regular Cash Flow: Creates a predictable, pension-like income stream to cover monthly expenses.
- Capital Appreciation: Your remaining corpus isn't idle; it continues to work for you, potentially growing and extending the life of your funds.
- Tax Efficiency: SWP can be more tax-friendly than options like Fixed Deposits, as only the capital gains component of the withdrawal is taxed.
- Flexibility and Control: You can modify the withdrawal amount, frequency, or stop the plan as your needs change.
Finding a Sustainable Withdrawal Rate (The 4% Rule)
A critical question for retirees is: "How much can I withdraw without running out of money?" A popular guideline is the **4% Rule**. It suggests that withdrawing 4% of your initial retirement portfolio annually (adjusted for inflation) gives you a high probability of your money lasting for at least 30 years. For a ₹1 Crore corpus, this would be ₹4 lakhs per year, or about ₹33,333 per month. Use our calculator to test this rule with your own numbers and see how different rates affect your corpus's longevity.
Frequently Asked Questions (FAQ)
What is a Systematic Withdrawal Plan (SWP)?
A Systematic Withdrawal Plan (SWP) is a facility that allows an investor to withdraw a fixed amount of money from their mutual fund scheme at regular intervals. It's the reverse of a SIP and is primarily used to create a regular cash flow during retirement.
How do I determine the right withdrawal amount?
A common guideline is the 4% rule, which suggests withdrawing 4% of your total corpus annually. However, the ideal amount depends on your expenses, expected investment returns, and desired corpus longevity. Our calculator lets you simulate different scenarios to find a balance that works for you.
What are the tax implications of an SWP?
SWP withdrawals are treated as redemptions and are subject to capital gains tax. For equity funds, long-term gains (held >1 year) are taxed at 10% on gains over ₹1 lakh annually. For debt funds, gains are added to your income and taxed at your slab rate. This structure can be more tax-efficient than interest from FDs.
Can I change my SWP amount or stop it?
Yes, SWPs are highly flexible. Most fund houses allow you to increase, decrease, pause, or stop your SWP at any time, giving you full control over your cash flow and investment.