Systematic Withdrawal Plan (SWP) Calculator
Plan withdrawals with our SWP calculator. Enter investment amount, expected returns, and withdrawal frequency to estimate payouts and ensure a steady income from your mutual funds.
₹10,00,000.00
₹5,000.00 / monthly
8.00 %
4.00 %
5.00 %
10 years
⚠️ Note: SWP results are based on assumptions and actual returns may vary depending on market performance, taxes, and changes in inflation.
| Year | Withdrawn | Interest | Tax | Balance |
|---|
What is a Systematic Withdrawal Plan (SWP)?
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your investment corpus at regular intervals (monthly, quarterly, or annually), while the remaining corpus continues to earn returns.
Inputs Required
To use the SWP Calculator, provide the total corpus, expected annual return rate, withdrawal frequency, and withdrawal duration. Optionally, include expected inflation to adjust withdrawals over time.
Benefits of SWP
- Regular Income: Provides a steady cash flow from your investments.
- Flexible Withdrawals: You can choose the amount and frequency of withdrawals.
- Tax Efficiency: Withdrawals from equity mutual funds held over 1 year are taxed favorably as long-term capital gains.
- Continued Growth: The remaining corpus stays invested, allowing potential growth over time.
SWP vs Lump Sum Withdrawal
SWP is ideal for investors who want a regular income stream while keeping the principal invested.
Lump Sum Withdrawal gives all the money at once, which may lead to reinvestment challenges or higher tax liability.
SWP helps in better financial planning and smoother wealth management over time.
Who Should Opt for SWP?
SWP is suitable for:
- Retirees seeking regular income
- Investors looking for a steady cash flow from their investments
- Those who want to avoid withdrawing the entire corpus at once
- Individuals aiming for disciplined, long-term wealth utilization
Taxation on SWP
Tax depends on the type of mutual fund:
- Equity Funds: Withdrawals held for more than 1 year are taxed at 10% LTCG if gains exceed ₹1 lakh; short-term withdrawals are taxed at 15%.
- Debt Funds: Taxed as per income tax slab for short-term (≤3 years), and 20% with indexation for long-term (3 years).
Can I Modify or Stop My SWP?
Yes, SWPs are flexible:
- Pause: Temporarily stop withdrawals without closing the plan.
- Modify: Change the withdrawal amount or frequency based on your needs.
- Stop: Exit completely if you no longer need periodic withdrawals.
Tips for Effective SWP
- Start withdrawals after the corpus has had time to grow to maximize returns.
- Align withdrawal amounts with your living expenses or financial goals.
- Consider inflation-adjusted withdrawals to maintain purchasing power over time.
- Diversify the underlying mutual funds to manage risk effectively.
SWP Formula
Systematic Withdrawal Plan (SWP)
Where:
Example Calculation
Example: Systematic Withdrawal Plan (SWP)
An investor has a mutual fund corpus of ₹20,00,000and plans to withdraw ₹25,000 per month for living expenses, with an expected annual return of 8% on the remaining corpus.
SWP Projection
- Monthly Withdrawal = ₹25,000
- Total Withdrawn over 5 Years ≈ ₹15,00,000
- Remaining Corpus ≈ ₹6,00,000
Key Insight
SWP allows investors to receive regular income while keeping part of the corpus invested for continued growth. The remaining corpus continues to earn returns, helping sustain withdrawals over a longer period.
Why Use an SWP Calculator
Using an SWP Calculator helps you plan regular income, maintain financial stability, and avoid prematurely depleting your investment corpus. It is particularly useful for retirees or those relying on investment income.