How to use this calculator?
Imagine you have a mutual fund investment worth ₹20,00,000, and you want to withdraw ₹15,000 every month for your post-retirement needs. You expect the investment to generate a return of 10% annually. Enter the following values:
- Initial Investment (Corpus): ₹20,00,000
- Monthly Withdrawal (SWP): ₹15,000
- Expected Annual Return: 10%
- Withdrawal Duration (in years): e.g. 15 years
The calculator will tell you how long your investment will last or the final amount remaining after your withdrawal period. It may also show the total withdrawn amount and interest earned during the plan.
This is especially useful for retirement planning or setting up a regular income stream without exhausting your investment too quickly.
SWP calculator
This calculator helps estimate the sustainability and outcome of a Systematic Withdrawal Plan. Whether you’re looking for monthly income or planning long-term withdrawals from your mutual fund corpus, it shows how your money behaves over time — factoring in growth and periodic deductions.
Formula used in this Calculator? With explanation
The SWP calculator works on compound interest logic while deducting a fixed amount every month. It uses the following logic:
Value at End of Month = Previous Value × (1 + r) – Withdrawal
- r = Monthly return (Annual Rate / 12 / 100)
- Withdrawal: Fixed monthly withdrawal amount
- The formula is applied recursively for each month
It keeps reducing the corpus after each withdrawal while also applying monthly growth on the remaining balance. The process continues until either the duration ends or the investment runs out.
Understanding the benefits:
SWP offers a tax-efficient, disciplined way to generate regular income from your mutual fund investment. Instead of withdrawing large chunks occasionally, you get consistent payouts while the rest of your money continues to grow.
This strategy is especially beneficial during retirement, or for supplementing other income sources. You stay invested in markets, potentially earning returns, while managing cash flow systematically.
It also gives you better control over your financial planning. Depending on your withdrawal rate and expected returns, you can tweak the plan to extend its longevity or reduce the risk of capital depletion.
However, SWPs are sensitive to market performance. It’s essential to review your plan periodically and seek advice from a financial planner to ensure your income remains sustainable over the years.
Disclaimer:
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