SWP Calculator

Output:
Remaining Corpus Over Time

SWP Calculator – Plan Your Monthly Withdrawals

The Systematic Withdrawal Plan (SWP) is a smart strategy for investors who want a regular income from their mutual fund investments. By using our SWP Calculator, you can estimate your monthly withdrawals and plan a steady cash flow.

What is a Systematic Withdrawal Plan (SWP)?

SWP allows investors to withdraw a fixed amount at regular intervals (monthly, quarterly, or yearly) from their mutual fund investments. It is an excellent way to generate passive income, especially for retirees and investors looking for financial stability.

How is SWP Calculated?

The formula used for SWP calculation is:

Future Value = P × [(1 + r/n)^(n×t)] - W × [(1 + r/n)^(n×t) - 1] / (r/n)

Where:

  • P = Initial Investment Amount
  • r = Expected Annual Return Rate
  • n = Number of compounding periods per year
  • t = Number of years
  • W = Withdrawal Amount

Example of SWP Calculation

Let’s assume:

  • You invest ₹10,00,000 in a mutual fund.
  • The expected annual return is 10%.
  • You withdraw ₹10,000 per month.
  • The investment period is 10 years.

Step 1: Growth of Investment
The ₹10,00,000 investment earns 10% per year, growing over time.

Step 2: Monthly Withdrawals
Every month, ₹10,000 is deducted from your investment.

Based on these inputs, your investment will last approximately 12 years before the corpus is exhausted.

Benefits of SWP

  • Regular Income: Ensures a steady cash flow.
  • Tax Efficiency: Only capital gains are taxed, making it better than fixed deposits.
  • Market Linked Growth: Your remaining investment continues to grow.
  • Flexibility: You can modify the withdrawal amount as per your needs.

How to Use the SWP Calculator?

  1. Enter the initial investment amount.
  2. Specify the expected annual return.
  3. Input the monthly withdrawal amount.
  4. Click Calculate to view how long your investment will last.

Frequently Asked Questions (FAQs)

SWP is ideal for retirees, salaried professionals, and investors looking for a steady income stream.

Only the capital gains portion of the withdrawal is taxed, making SWP more tax-efficient than fixed deposits.

Since SWP withdrawals come from your investment, a market downturn may reduce the longevity of your corpus.

Yes, SWP offers flexibility. You can increase or decrease the withdrawal amount based on your needs.

SWP offers tax advantages and potential market growth, whereas fixed deposits provide fixed returns. SWP is better for long-term wealth preservation.

Conclusion

The SWP Calculator helps investors plan their monthly withdrawals while ensuring their investment continues to grow. Whether for retirement, passive income, or financial planning, SWP is a powerful tool for managing cash flow effectively.