SWP Calculator

A Systematic Withdrawal Plan (SWP) is the mirror image of a SIP: instead of investing a fixed amount every month, you withdraw one from a mutual fund corpus while the balance keeps earning returns. This SWP calculator simulates the plan month by month and shows how long your money lasts and what is left at the end.

It is the standard tool for planning retirement income or a second cash flow from a lump sum. Adjust the withdrawal amount and expected return and you will quickly see the tipping point where withdrawals outrun growth — the calculator warns you the moment the corpus is set to run dry before your horizon ends.

How does an SWP calculation work?

There is no closed-form shortcut worth trusting here, so the calculator runs the plan month by month. Each month the balance first grows by one month's return, i = Annual return ÷ 12, and then the withdrawal is taken: Balance = Balance × (1 + i) − Monthly withdrawal. The loop repeats until the horizon ends or the balance hits zero, whichever comes first.

Worked example: a corpus of ₹50,00,000 at an expected 8% a year earns about ₹33,300 in the first month, so a withdrawal of ₹30,000 a month is comfortably covered by growth alone. Over 20 years you draw ₹72,00,000 in total and still finish with roughly ₹69.6 lakh in the fund. Push the withdrawal higher, or start with a smaller corpus, and the maths flips — ₹10,00,000 at 8% supports ₹50,000 a month for only 22 months before it is exhausted.

How to use this calculator

• Enter the lump sum you are investing, or the corpus you already hold in the fund.
• Set the monthly withdrawal you want credited to your bank account.
• Choose a realistic expected return — 7–9% for a debt or conservative hybrid fund, 10–12% for an equity-oriented one over long horizons.
• Set the number of years you need the income to run.
• Watch the 'Corpus lasts' figure and the red warning: if it appears, reduce the withdrawal or increase the corpus until the plan survives your full horizon.

Using an SWP in India

SWPs are popular with retirees because they are far more tax-efficient than a dividend option or a fixed deposit's interest. Each withdrawal is a partial redemption, so only the capital gain inside that withdrawal is taxed — not the whole amount. Equity funds held over a year attract 12.5% long-term capital gains tax above the ₹1.25 lakh annual exemption, while debt fund gains are added to your slab income, so the effective tax on an SWP is usually well below what interest income would attract.

The real risk is sequence of returns: a market fall in the early years, while you are also withdrawing, permanently shrinks the base that has to recover. A common rule of thumb is to keep the annual withdrawal at or below 4–6% of the corpus and to run the SWP from a hybrid or debt-oriented fund rather than a pure equity one if you cannot tolerate a dip. Review the plan every year and trim the withdrawal after a bad market year rather than letting the corpus drain silently.

Frequently asked questions