SWP Calculator — Plan Your Monthly Income Without Depleting Your Corpus

A Systematic Withdrawal Plan lets you draw a fixed monthly income from your mutual fund while the remaining corpus stays invested and continues to earn. It is essentially the opposite of a SIP — instead of accumulating, you are distributing. This SWP calculator shows you whether your corpus will last through your planned withdrawal period or run out before then.

Enter your starting corpus, the monthly withdrawal amount, the expected annual return on the remaining invested amount, and the number of years you want withdrawals to continue. The result tells you your remaining balance at the end of the period and total amount withdrawn.

Why SWP Works Well as a Retirement Income Strategy

The beauty of SWP is that your money does not sit idle while you draw from it. If your corpus is earning, say, 8 percent annually and you are withdrawing at a rate that is lower than that return, the corpus actually grows over time even as you take monthly payouts. This means your income source can potentially last longer than the tenure you planned for.

This is in contrast to an FD, where the principal is locked and interest is paid out — the capital does not grow. With SWP from a mutual fund, the remaining corpus keeps compounding.

SWP vs FD Interest — Which Is More Tax Efficient?

FD interest is added to your taxable income every year and taxed at your slab rate — 20 or 30 percent for most retirees. SWP redemptions from equity mutual funds, on the other hand, are treated as unit redemptions. Only the gain component of each withdrawal is taxed. And if the units being redeemed have been held for more than a year, long-term capital gains tax of 12.5 percent applies above ₹1.25 lakh per year. That is a meaningful tax advantage, especially for larger corpora.

Getting the Withdrawal Rate Right

A sustainable withdrawal rate depends on your corpus size and the expected return on investment. A widely referenced benchmark in retirement planning is the 4 percent annual withdrawal rule — taking out 4 percent of your corpus each year (about 0.33 percent monthly) is generally considered sustainable for 25 to 30 years if the corpus earns 7 to 8 percent. Going above this, especially in the early years, increases the risk of depleting your corpus faster than anticipated.

Flexibility That Other Income Options Lack

Unlike annuities or pension plans, SWP gives you complete flexibility. You can increase or decrease the monthly withdrawal amount at any time. You can pause withdrawals if you do not need the income in a particular month. You can redeem the remaining corpus partially or fully whenever you choose. That level of control over your own money is something fixed-income instruments simply cannot offer.

Disclaimer: SWP projections depend on actual fund returns, which vary. This calculator is for planning purposes only.