SWP Calculator (Systematic Withdrawal Plan)

A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from a mutual fund investment at regular intervals — commonly monthly. It's popular with retirees who want a regular "salary" from a lump-sum corpus, and with investors planning income from their investments.

How the calculation works

The calculator simulates the corpus month by month:

• Each month the balance earns the expected monthly return.
• Your fixed withdrawal is then deducted.
• This repeats until the balance hits zero.

If your withdrawal is larger than the monthly earnings, the corpus shrinks — eventually to nothing. If it's smaller than the earnings, your money can last indefinitely and even grow.

Worked example

Invest ₹50,00,000 expecting 8% annual returns, withdrawing ₹25,000 per month:

• Monthly return = 8% ÷ 12 ≈ 0.667%
• Balance after month 1 = 50,00,000 × 1.00667 − 25,000 ≈ ₹50,33,333
• The corpus keeps growing for years because ₹25,000 is below the ~₹33,333 monthly earnings, so your money effectively never runs out — the calculator shows it lasting the full 50-year horizon.

Now try ₹50,000 per month: the corpus declines and this time the math is unfriendly. The withdrawal eats into principal every month, and the corpus runs out after 166 months — 13 years and 10 months. You will have withdrawn ₹83 lakh in total, meaning the fund returned ₹33 lakh of net income on top of your ₹50 lakh — but the corpus is gone, and the income stops with it.

The sustainable-withdrawal lesson

The ₹25,000 vs ₹50,000 contrast is the whole of retirement planning in miniature:

• Withdraw below the ~₹33,333 monthly earnings: income is sustainable, corpus intact.
• Withdraw above it: you are consuming principal, and the duration falls steeply — ₹50,000 (1.5× the earnings) lasts only ~14 years, not the ~66 years a naive "50 lakh ÷ 50,000" division would suggest.

The classic planning rate is a withdrawal of roughly 4% of the corpus per year — on ₹50 lakh that's ₹16,667 a month — a level that historically preserves the corpus through volatile markets.

A note on returns and risk

SWPs usually run on equity or hybrid funds, so returns vary. This tool uses a flat expected return for simplicity. In practice, volatile returns mean the corpus can last shorter or longer than projected — a bad market in the first few withdrawal years does disproportionate damage, because you are selling units at low prices to fund withdrawals. Consider a Year/Sequence-of-returns reality check: keep 2–3 years of withdrawals in debt (FDs/debt funds) so you never have to redeem equity in a down year.

Tax touchpoint

SWP withdrawals carry a tax tag most planners forget: a portion is your original capital (tax-free) and a portion is capital gain (taxable, often under mutual-fund LTCG/STCG rules). Your actual post-tax income is therefore slightly lower than the neat monthly figure — pair this with the income-tax calculator for a realistic spendable number.