SWP Calculator
Calculate how long your investment will last with Systematic Withdrawal Plan
SWP Details
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How SWP (Systematic Withdrawal Plan) Works?
SWP (Systematic Withdrawal Plan) is a mutual fund facility that allows you to withdraw a fixed amount regularly from your investment while keeping the remaining corpus invested. It's ideal for generating regular income during retirement or for meeting periodic financial needs.
SWP Calculation Process
Monthly Withdrawal: Withdrawal Amount = Fixed Monthly Amount
Remaining Balance: Balance = Previous Balance × (1 + Monthly Return) - Withdrawal
Months Lasted: Until balance reaches zero or minimum threshold
Where:
- Initial Investment = Starting corpus amount
- Monthly Withdrawal = Fixed amount withdrawn each month
- Expected Return = Annual expected return rate (converted to monthly)
- Months Lasted = Number of months the corpus can sustain withdrawals
Example:
Let's calculate SWP for an initial investment of ₹50,00,000 with monthly withdrawal of ₹25,000 and expected annual return of 12%.
Given: Initial Investment = ₹50,00,000, Monthly Withdrawal = ₹25,000, Annual Return = 12%
Step 1: Calculate Monthly Return Rate
Monthly Rate = 12% / 12 = 1% = 0.01
Step 2: Calculate First Month
Month 1: Balance = ₹50,00,000 × 1.01 - ₹25,000
Month 1: Balance = ₹50,50,000 - ₹25,000 = ₹50,25,000
Step 3: Continue Until Balance Depletes
The process continues month by month until the balance can no longer support the withdrawal.
Result: With ₹50,00,000 at 12% annual return, withdrawing ₹25,000 monthly, your corpus will last approximately 25-30 years, depending on market performance.
Use Cases for SWP Calculator
Retirement Income
Generate regular monthly income during retirement
Regular Cash Flow
Create steady income stream from investments
Tax Efficiency
Plan withdrawals to optimize tax liability
Financial Planning
Plan how long your corpus will last with regular withdrawals
Benefits of Using Our SWP Calculator
Plan regular income from investments
Understand how long your corpus will last
Make informed withdrawal decisions
Balance income needs with corpus preservation
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SWP Calculator FAQs
❓What is SWP (Systematic Withdrawal Plan)?
SWP is a facility offered by mutual funds that allows you to withdraw a fixed amount regularly (monthly, quarterly, etc.) from your investment. It's ideal for generating regular income from your investments while keeping the remaining amount invested.
❓How does SWP work?
In SWP, you invest a lump sum amount and set up automatic withdrawals at regular intervals. The fund sells units to meet your withdrawal amount. The remaining investment continues to grow, potentially generating income for an extended period.
❓What is the difference between SWP and SIP?
SIP (Systematic Investment Plan) involves regular investments into a fund, while SWP involves regular withdrawals from an existing investment. SIP builds wealth, while SWP generates regular income from accumulated wealth.
❓Is SWP taxable?
Yes, SWP withdrawals are subject to capital gains tax. Short-term capital gains (if units held less than 1 year for equity funds, 3 years for debt funds) are taxed as per your income tax slab. Long-term gains have different tax rates based on fund type.
❓Is this SWP calculator accurate?
This calculator provides estimates based on assumed returns. Actual returns may vary based on market conditions and fund performance. Always consult with a financial advisor and check actual fund performance before making investment decisions.