💸 SWP Calculator
A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed sum from a mutual fund periodically. Calculate how long your corpus will last based on your withdrawal rate and expected returns.
| Year | Opening Balance | Amt Withdrawn | Interest Earned | Closing Balance |
|---|
What is an SWP Calculator?
A Systematic Withdrawal Plan (SWP) Calculator shows you how a mutual fund corpus diminishes over time when you withdraw a fixed monthly amount, while the remaining balance continues to generate returns.
How it Works
When you invest a lump sum into a mutual fund and start an SWP, units equivalent to your withdrawal amount are redeemed every month. The residual units continue to grow according to the market performance.
Formula: Balance = P × (1 + r/12)ⁿ – W × [((1 + r/12)ⁿ – 1) / (r/12)]
When to use SWP?
- Post-Retirement Income: Create a steady monthly “pension” from your retirement corpus.
- Child’s Education: Pay monthly hostel or college fees from a dedicated fund.
- Tax Efficiency: Compared to fixed deposit interest (which is fully taxable), SWP withdrawals are structured as capital gains, making them significantly more tax-efficient in the long term.
Safe Withdrawal Rate
If your annual withdrawal is significantly lower than your expected annual return (e.g., withdrawing 4% per year while earning 8%), your corpus will grow despite the withdrawals. If withdrawals > returns, the corpus will deplete.