SWP Calculator – Systematic Withdrawal Plan
Determine how long your invested corpus will last with fixed monthly withdrawals, taking expected return rates into consideration.
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Systematic Withdrawal Plans (SWP) for Regular Income
An SWP allows you to withdraw a fixed amount of money from your mutual fund scheme at regular intervals. It is widely used by retirees to set up a regular monthly pension out of their accumulated corpus while the remaining balance continues to compound.
The main advantage of an SWP is its tax efficiency compared to traditional bank annuities or dividend payouts, as each withdrawal is treated as a partial redemption of capital rather than direct income.
Frequently Asked Questions (FAQ)
1. What is the safe withdrawal rate (SWR) in India?
Generally, retirees are advised to limit their annual SWP withdrawals to 4% - 6% of their initial corpus to ensure the funds outlive their retirement horizon.
2. Does the principal balance reduce immediately?
If the rate of return of the mutual fund is higher than your withdrawal rate, your principal balance will continue to grow over time despite the monthly payouts.