SWP Calculator
Enter your invested corpus, the monthly amount you want to withdraw and an expected return — and see your remaining balance year by year, or exactly how long the corpus will last.
What is an SWP?
A Systematic Withdrawal Plan (SWP) is the mirror image of a SIP: instead of investing a fixed amount every month, you redeem a fixed amount from your mutual fund holding while the balance stays invested and keeps compounding. It is the standard way in India to turn a retirement corpus, an inheritance, an ESOP payout or a maturing investment into a predictable monthly income — without handing control to a fund manager's dividend decisions or locking your money into an annuity.
The withdrawal rate decides everything
Whether your money lasts a decade or lasts forever comes down to a single number: the annual withdrawal rate — your yearly withdrawals expressed as a percentage of the corpus. Keep that rate below your return and the untouched balance grows faster than you spend it, so the corpus can outlive you. Cross your return, and every month you dip into principal — which shrinks the base that earns returns, so the depletion accelerates the longer it runs.
Here is how the same ₹1 crore at an 8% expected return behaves at different withdrawal rates:
| Withdrawal rate | Monthly income | Balance after 20 years | Verdict |
|---|---|---|---|
| 4% (₹4L/yr) | ₹33,333 | ≈ ₹2.95 crore | Grows strongly — effectively perpetual |
| 6% (₹6L/yr) | ₹50,000 | ≈ ₹1.96 crore | Still growing — comfortably sustainable |
| 8% (₹8L/yr) | ₹66,667 | ≈ ₹97 lakh | Roughly holds steady for 40+ years |
| 10% (₹10L/yr) | ₹83,333 | Depleted (~year 20) | Runs dry in about 20 years |
| 12% (₹12L/yr) | ₹1,00,000 | Depleted (~year 14) | Runs dry in about 14 years |
A widely used rule of thumb is to keep withdrawals in the 4–6% range for a corpus that must last 25 years or more, leaving a cushion for inflation and for weak-market years.
A worked example
Suppose you invest ₹50 lakh in a balanced fund earning 8% and withdraw ₹30,000 every month for 20 years. Because ₹30,000/month is only 7.2% of the corpus a year — and each withdrawal comes out at the start of the month while the rest keeps compounding — you draw a total of ₹72 lakh over 20 years and still finish with a balance of about ₹68.5 lakh. Along the way your ₹50 lakh generated roughly ₹90 lakh of returns, paid your income, and grew. That is the counter-intuitive power of staying under your return rate. Build that starting corpus with a disciplined lumpsum investment or a monthly SIP, then flip it into an SWP when you retire.
SWP vs FD interest vs dividend plan
The biggest edge of an SWP is tax treatment. Every withdrawal is a redemption of units, so only the gains portion of each rupee is taxable — not the capital you are simply getting back. Contrast that with an FD, where the entire interest is taxed at your slab rate, or a fund's dividend (IDCW) option, where the whole payout is taxed at slab.
| Income source | How it is taxed | Corpus keeps growing? |
|---|---|---|
| SWP from equity fund (units held 1 yr+) | Only the gains portion; 12.5% LTCG on gains above ₹1.25 lakh a year | Yes |
| SWP from debt fund | Gains taxed at your slab rate | Yes |
| FD monthly interest payout | Full interest at slab rate; TDS above the bank's annual threshold | No |
| Dividend / IDCW option | Full payout at slab rate | Fund decides the amount |
For equity funds, redemptions after 12 months qualify for long-term capital-gains treatment and the ₹1.25 lakh yearly exemption; debt funds bought on or after 1 April 2023 are always taxed at slab, with no long-term benefit. Because only part of each SWP redemption is gain, your effective tax rate is usually far below what you would pay on the same income from an FD. Check your slab with our Income Tax Calculator and compare guaranteed payouts using the FD Calculator. Unlike a dividend plan, an SWP also puts you in charge of the amount and timing — you can raise, pause or stop it whenever you like.
Sequence-of-returns risk
A fixed-rate projection assumes a smooth 8% every single year. Real markets rarely oblige. If a sharp fall lands in the first few years of your SWP — while the corpus is largest and you are still selling units to fund withdrawals — you crystallise losses on more units and leave far less invested to ride the eventual rebound. Two retirees with identical average returns can end up with wildly different outcomes purely because of the order in which good and bad years arrived. That is why a withdrawal which looks perfectly safe on paper can still fail in practice, and why cushioning early volatility matters more than chasing the highest headline return.
Which funds suit an SWP?
- Hybrid and balanced-advantage funds — the usual first choice: enough equity for growth, enough debt to soften the crashes.
- Debt or conservative-hybrid funds — for retirees who value stability and predictable withdrawals over aggressive growth.
- Pure equity funds — only with a long horizon and a spending buffer, because a bad early sequence can do lasting damage.
A common approach is a two-bucket setup: keep two to three years of withdrawals in a liquid or debt fund, run the SWP out of that bucket, and let a separate equity pot grow untouched — refilling the safe bucket in the good years.
When should you start?
Time your first withdrawal for at least 12 months after investing. That clears the exit-load window on most funds (typically a 1% charge if you redeem within a year) and, for equity funds, pushes your gains into the lower long-term capital-gains bracket. Start an SWP too early and you can pay an exit load and the higher 20% short-term capital-gains rate on equity — a double hit that quietly erodes the corpus before it has a chance to compound.
Keep pace with inflation
A ₹50,000 monthly income feels comfortable today but buys far less in 15 years. Revisit your withdrawal every year and step it up gradually — or start below the maximum "safe" figure so you leave headroom to increase it later. See how much your income needs to grow with our Inflation Calculator, and if you are still building the retirement pot, the NPS Calculator shows how a pension corpus stacks up alongside your mutual-fund savings.