SWP Calculator
See how long your corpus lasts with a systematic withdrawal plan, including yearly withdrawal increases and returns earned.
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Tool guide
What this tool does
The SWP Calculator models regular monthly withdrawals from an invested corpus that keeps earning returns. It shows the closing balance, total withdrawn, returns earned, how many years the money lasts and the withdrawal that preserves the original capital.
A systematic withdrawal plan (SWP) redeems a fixed amount from a mutual fund at regular intervals, turning a lump sum into a monthly income while the remaining units stay invested. Retirees use it for pension-like cash flow, and others use it to fund fees or rent. The key risk is withdrawing faster than the corpus can earn, which can exhaust the money years earlier than expected.
This calculator simulates the plan month by month: the balance earns the annual return divided by 12 and the withdrawal is taken at the start or end of each month, as you choose. You can raise the withdrawal every year to keep pace with inflation. It reports when the corpus runs out, if it does, and the monthly withdrawal equal to the return alone, which leaves capital intact. The figures are estimates that assume a constant return.
How to use SWP Calculator
- Choose the currency and enter the total amount invested.
- Enter the monthly withdrawal you need.
- Enter the expected annual return of the fund.
- Enter the withdrawal period in years.
- Optionally set a yearly increase in the withdrawal, such as 5%, and choose start- or end-of-month timing.
- Check whether the money lasts, then review the balance chart and the year-wise schedule.
Tips for better results
- Keep the starting withdrawal at or below the capital-preserving figure if you want the corpus to outlive you.
- Hold one to two years of withdrawals in a liquid or short-duration fund so you do not sell equity units during a market fall.
- Include a yearly increase in the model; a flat withdrawal loses about half its purchasing power in 12 years at 6% inflation.
- Each SWP payment is partly your own capital and partly gain, so tax applies only to the gain portion.
Common use cases
- Planning a retirement income from a corpus built through SIPs or a provident fund payout.
- Funding a child’s college fees from an invested amount over four years.
- Testing whether a 4% annual withdrawal rate is sustainable at different returns.
- Comparing an SWP with an annuity or a monthly-income deposit.
Common mistakes to avoid
- Assuming the fund’s past return will continue unchanged during withdrawals; poor early returns hurt an SWP the most.
- Withdrawing a fixed amount for 25 years without allowing for inflation.
- Forgetting exit loads on redemptions made within the fund’s exit-load period.
Frequently asked questions
How does an SWP differ from a dividend option?
An SWP gives a fixed amount you choose on fixed dates by redeeming units. Dividend (IDCW) payouts are decided by the fund and vary in amount and timing.
What is the withdrawal that preserves capital?
It is the monthly amount equal to the return the corpus earns each month, so the balance stays the same. Withdrawing more slowly uses up capital.
Is SWP income taxable?
Each withdrawal is a redemption, so capital gains tax applies to the gain part of the units sold according to the fund type and holding period. The capital part is not taxed.
What does start or end of month change?
Withdrawing at the start means the money leaves before it earns that month’s return, so the balance lasts slightly less long than with end-of-month withdrawals.
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