SWP Calculator
Draw a monthly income from your corpus
- Withdrawn₹72.00 L42%
- Still invested₹1.00 Cr58%
| Withdrawn | ₹72.00 L | 41.8% |
| Still invested | ₹1.00 Cr | 58.2% |
Year-wise withdrawal schedule
| Year | Opening balance | Withdrawn | Returns | Closing balance |
|---|---|---|---|---|
| 1 | ₹50,00,000 | ₹3,60,000 | ₹4,53,807 | ₹50,93,807 |
| 2 | ₹50,93,807 | ₹3,60,000 | ₹4,62,607 | ₹51,96,414 |
| 3 | ₹51,96,414 | ₹3,60,000 | ₹4,72,232 | ₹53,08,645 |
| 4 | ₹53,08,645 | ₹3,60,000 | ₹4,82,760 | ₹54,31,405 |
| 5 | ₹54,31,405 | ₹3,60,000 | ₹4,94,276 | ₹55,65,681 |
| 6 | ₹55,65,681 | ₹3,60,000 | ₹5,06,872 | ₹57,12,553 |
| 7 | ₹57,12,553 | ₹3,60,000 | ₹5,20,649 | ₹58,73,202 |
| 8 | ₹58,73,202 | ₹3,60,000 | ₹5,35,719 | ₹60,48,921 |
| 9 | ₹60,48,921 | ₹3,60,000 | ₹5,52,203 | ₹62,41,124 |
| 10 | ₹62,41,124 | ₹3,60,000 | ₹5,70,233 | ₹64,51,357 |
Understand the result
About the SWP Calculator
What is a systematic withdrawal plan (SWP)?
A systematic withdrawal plan is the reverse of a SIP: you invest a lumpsum in a mutual fund and instruct the fund to pay you a fixed amount every month by redeeming units. The balance stays invested and keeps earning returns, so a well-sized SWP can pay an income for decades. Retirees often use SWPs from hybrid or debt funds as a flexible, tax-efficient alternative to interest income.
This SWP calculator shows how long your corpus lasts at a given monthly withdrawal, how much remains at the end of the period, the total withdrawn, and a year-by-year balance, with an option to increase withdrawals each year for inflation.
How this calculator works
A systematic withdrawal plan is a SIP in reverse. A lumpsum stays invested and a fixed amount is redeemed every month, so the corpus keeps earning on whatever is left while it pays you an income. It is the standard way retirees draw from mutual funds instead of buying an annuity.
Each month the balance first earns a month of return and the withdrawal is then deducted — the order every fund house uses. Whether the corpus outlives you comes down to the gap between the return rate and the withdrawal rate: if you withdraw less than you earn, the balance grows even while paying you.
The safe monthly withdrawal figure shown above is the amount equal to one month of return. Take exactly that and your capital never shrinks. Take more and you are eating into the principal — which may be perfectly sensible, as long as you know how long it will last.
The annual increase option matters more than it looks. At 6% inflation, ₹30,000 a month buys roughly half as much after twelve years, so a flat withdrawal is a quietly shrinking income.
Formula
Each month: balance = balance × (1 + r) − withdrawal r = annual return ÷ 12 Safe withdrawal = corpus × r (capital stays intact)
Worked example
- ₹50,00,000 invested at 9%, withdrawing ₹30,000 a month.
- One month of return is 50,00,000 × 0.0075 = ₹37,500 — more than the withdrawal.
- The corpus therefore grows despite paying out, and after 20 years it is larger than when you started.
How the withdrawal rate decides how long money lasts
| Monthly withdrawal | Yearly withdrawal as % of corpus | Result after 30 years |
|---|---|---|
| ₹25,000 | 6% | Corpus grows to about ₹1.74 crore |
| ₹35,000 | 8.4% | About ₹25 lakh left |
| ₹50,000 | 12% | Runs out after 13 years 10 months |
As long as withdrawals stay below what the corpus earns, the balance keeps growing. Withdraw more than it earns and the corpus shrinks — slowly at first, then quickly. If you plan to raise withdrawals with inflation, start lower still.
How SWP income is taxed
Each SWP payment is a redemption of units, so only the gain portion of each withdrawal is taxed, not the whole amount. In the early years most of each payment is your own capital coming back, so the tax is small. Units are redeemed first-in, first-out. For equity funds, long-term gains above ₹1.25 lakh a year are taxed at 12.5%; for debt funds bought after 31 March 2023, gains are taxed at your slab rate. This usually compares well with FD interest, which is taxed in full every year.
Assumptions & important notes
What this calculator assumes
- Returns are steady every month. Real markets are not, and a run of bad years early in the withdrawal period does disproportionate damage — this is called sequence-of-returns risk.
- Withdrawals happen at the end of each month, after that month has earned its return.
- Capital gains tax on each redemption is not deducted. Every SWP withdrawal is a partial redemption and is taxable.
- No exit load is applied. Many funds charge one if you redeem within a year of investing.
Important notes
- Each withdrawal is treated as a redemption for tax: equity fund gains are taxed at 12.5% above ₹1.25 lakh a year if held over a year, and at 20% if held for less.
- Only the gain portion of each withdrawal is taxed, not the whole amount — which makes an SWP considerably more tax-efficient than an annuity or interest income.
- A widely used rule of thumb is to withdraw no more than 4% of the corpus a year. On ₹50 lakh that is about ₹16,600 a month.
Frequently asked questions
How is an SWP better than a fixed deposit for income?
FD interest is fully taxed at your slab rate every year. In an SWP only the capital gain within each withdrawal is taxed, and long-term equity gains enjoy a lower rate plus an annual exemption. The trade-off is that SWP returns are not guaranteed.
What happens if the market falls early on?
You redeem more units to raise the same rupee amount, permanently reducing the corpus. This sequence-of-returns risk is why withdrawal portfolios are usually more conservative than accumulation portfolios.
How much can I safely withdraw?
If you never want the capital to fall, withdraw no more than one month of return. If you are happy to run the corpus down over a defined period, you can withdraw considerably more — set the period above and check the balance lasts.
Can I change the withdrawal amount later?
Yes. SWPs can be stopped, paused or revised at any time without penalty, which is the main advantage over an annuity, where the rate is locked for life.
Which funds are suitable for an SWP?
For a steady retirement income, many investors use conservative hybrid, balanced advantage or short-duration debt funds, which fluctuate less than pure equity. For a very long horizon, a portion in equity helps the corpus keep pace with inflation.
Is an SWP the same as a dividend option?
No. An SWP pays a fixed amount you choose on a fixed date. Dividends (IDCW) are paid only when the fund declares them, vary in amount, and are fully taxable at your slab rate.
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