Plan monthly withdrawals from your investment and see the balance left — or when it runs out.
How an SWP works
A Systematic Withdrawal Plan takes a fixed amount from your mutual-fund investment every month while the rest stays invested and keeps earning. It is the mirror image of a SIP and is popular for retirement income.
Balance each month = (Previous balance × (1 + monthly return)) − WithdrawalExample
₹50 lakh corpus, ₹30,000 a month, 8% return: after 20 years you have withdrawn ₹72 lakh and still hold about ₹66 lakh, because the growth (₹3.3 lakh/year at first) covers most of the withdrawal (₹3.6 lakh/year). Raise the withdrawal to ₹45,000 and the corpus runs out in about 19 years.
Choosing a safe withdrawal
- The tool shows the withdrawal that keeps your corpus roughly intact: corpus × monthly return.
- Withdraw less than the return to let the corpus grow with inflation.
- Keep 2–3 years of withdrawals in a liquid or short-duration fund so you never sell equity in a crash.
- SWP from equity funds held over a year is taxed as long-term capital gains (12.5% above ₹1.25 lakh gains a year), often lower than FD interest tax.
Build the corpus first with the SIP calculator; estimate how much you need with the retirement calculator.
How to use the SWP calculator
- Enter the corpus you will invest (the lump sum in a mutual fund).
- Enter the amount you want to withdraw every month and the expected yearly return (7% for a conservative hybrid/debt fund, 9–10% for balanced advantage).
- Set the period in years and read the balance left — or the month in which the money runs out.
- Adjust the withdrawal until the corpus lasts as long as you need (or grows).
Step-by-step: ₹50 lakh, withdraw ₹30,000 a month at 8%
- Monthly return: 8 ÷ 12 = 0.667%.
- Month 1: 50,00,000 × 1.00667 = 50,33,333; minus 30,000 = ₹50,03,333.
- Month 2: 50,03,333 × 1.00667 − 30,000 = ₹50,06,689.
- The corpus grows slowly because the return (₹33,333) exceeds the withdrawal. After 10 years: ₹56,09,820 remains — you drew ₹36 lakh and still have more than you started with.
The safe-withdrawal sweet spot is a monthly withdrawal of about 0.5% of the corpus (6% a year) at 8% returns — the corpus keeps pace with inflation over long periods.
Worked examples
| Situation | Working | Answer |
|---|
| ₹20 lakh, ₹15,000 a month at 7%, 5 years | withdrawal 9% a year > return | ₹17,61,357 left; lasts about 21½ years in all |
| ₹1 crore, ₹60,000 a month at 8%, 20 years | 7.2% a year withdrawal | ₹1,39,26,803 left |
| ₹30 lakh, ₹40,000 a month at 7% | 16% a year withdrawal | runs out in about 8 years 3 months |
SWP vs FD interest vs dividends
An SWP from a mutual fund is taxed only on the gain portion of each withdrawal (12.5% LTCG above ₹1.25 lakh a year for equity funds after one year), whereas FD interest and MIS payouts are fully taxable at your slab. SWPs also let you choose the exact monthly amount, unlike dividends. The flip side: a market fall early in retirement hurts — keep 2 years of withdrawals in a liquid fund.
Tips and common mistakes
- Start the SWP a year after investing in equity-oriented funds so withdrawals qualify as long-term gains.
- Increase the withdrawal by 5–6% a year for inflation and re-run the calculator; a fixed ₹30,000 buys much less after 10 years.
- Combine: SCSS and MIS for guaranteed income, SWP for growth.
Frequently asked questions
How long will ₹1 crore last with ₹50,000 monthly SWP?
At 8% return, a little over 50 years — the ₹8 lakh yearly growth exceeds the ₹6 lakh withdrawn, so the corpus keeps growing. At ₹75,000 a month it lasts about 23 years.
Is SWP better than an FD for monthly income?
An SWP from a balanced or debt fund can be more tax-efficient than FD interest, and the balance stays invested. But returns are not guaranteed like an FD. Many retirees combine both.
How is SWP taxed?
Each withdrawal is part principal, part gain. Only the gain is taxed — as capital gains depending on the fund type and holding period — not the whole withdrawal.