A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount from your mutual fund investment every month while the rest of your money continues to grow. Our SWP Calculator helps you design a sustainable pension plan from your own corpus without accidentally bankrupting your nest egg.
How to use the SWP Calculator?
1. Total Investment: Enter your total accumulated corpus (the lump sum currently in your mutual fund or savings).
2. Monthly Withdrawal: Plan how much cash you need sent to your bank account every single month.
3. Return Rate: The expected annual growth rate of your remaining investment.
4. Time Period: How long you want this pension to last.
The Golden Rule of SWP
If your monthly withdrawal rate is lower than your portfolio's growth rate, your overall corpus will technically never deplete and will continue to grow forever while paying you a salary. If your withdrawals exceed the growth rate, you will see a warning in our calculator indicating your capital is eroding.
Frequently Asked Questions
Financial planners generally recommend the "4% Rule". This means you should aim to withdraw around 4% to 6% of your original corpus annually (e.g., around ₹40,000 monthly for a ₹1 Crore corpus) to ensure the money outlasts a 30-year retirement.
When you use SWP, every withdrawal consists of two parts: your original Principal, and the Capital Gain. You are ONLY taxed on the Capital Gain portion according to standard LTCG/STCG rules, making SWP heavily tax-efficient compared to Fixed Deposit interest.
SWP is vastly superior. In a mutual fund dividend plan, the dividends are added to your taxable income and taxed at your slab rate. In SWP, only the minimal capital gains portion is taxed, often at a flat 12.5% (LTCG).
If your monthly withdrawals aggressively outpace your returns, your principle will erode until the balance reaches zero, at which point the mutual fund AMC will automatically terminate the SWP mandate.
Yes, SWP mandates are completely flexible. You can log into your mutual fund portal at any time to halt, decrease, or increase your monthly withdrawal amount as your living expenses change.