Understanding the SWP Calculator

A Systematic Withdrawal Plan (SWP) is a facility offered by mutual funds that allows you to withdraw a fixed amount of money from your investment at regular intervals (e.g., monthly). It's an excellent way to create a regular cash flow from your accumulated corpus, making it a popular choice for retirees who want a pension-like income.

How Does it Work?

Our SWP calculator helps you figure out how long your investment will last based on your withdrawal rate. You need to provide: 1. Total Investment: The lump sum amount you have invested. 2. Monthly Withdrawal Amount: The fixed amount you wish to withdraw every month. 3. Expected Annual Return: The rate at which you expect your remaining investment to grow. The calculator then simulates the process month-by-month, deducting your withdrawal and adding the investment return to the remaining balance, until the corpus is depleted.

Why Use an SWP?

• Regular Income: It provides a predictable monthly income stream, perfect for meeting regular expenses in retirement.
• Tax Efficiency: SWP is more tax-efficient than receiving interest from FDs. Each withdrawal consists of a principal component (your money) and a capital gains component. You only pay tax on the gains, not the principal.
• Potential for Growth: Your remaining corpus continues to stay invested and grow, which can make your money last longer than if you just kept it in a bank account.