SWP Calculator

A Systematic Withdrawal Plan (SWP) is the exact opposite of an SIP. Instead of investing a fixed amount every month while you are working, you automatically withdraw a fixed amount every month from a lump sum corpus when you are retired.

The mathematical magic of an SWP is that the money you haven't withdrawn yet continues to grow in the market.

If you have ₹1 Crore in a mutual fund generating 10% annually, and you withdraw ₹80,000 every month (which totals ₹9.6 Lakhs a year), your withdrawals are actually less than the interest being generated by the fund!

In this scenario, your corpus will never deplete. In fact, it will keep growing, even while it pays you a monthly salary.

Many retirees prefer SWPs from mutual funds over standard Bank FDs for two major reasons:

• Higher Potential Returns: Equity or Hybrid mutual funds typically offer higher long-term returns than standard FDs, helping beat inflation.
• Tax Efficiency: When you receive FD interest, the entire interest amount is fully taxable every year as regular income. When you withdraw money via an SWP, only the capital gains portion of that specific withdrawal is taxed. Furthermore, long-term capital gains on equity currently enjoy a ₹1.25 Lakh tax-free limit per year in India.