SWP Calculator

What is SWP (Systematic Withdrawal Plan)?

A Systematic Withdrawal Plan (SWP) allows you to withdraw a fixed amount regularly from your mutual fund investments. It's ideal for retirees or anyone seeking regular monthly income from their investment corpus while the remaining amount continues to earn returns.

How SWP Works (Correct Calculation Method)

The accurate SWP calculation follows this sequence each month: First, the monthly withdrawal is deducted from the balance. Then, the remaining balance earns returns for that month. This order ensures realistic simulation since returns are earned only on the amount that remains invested. Profit Earned = Total Withdrawal - Total Investment.

SWP Calculation Formula

Monthly Rate = (Annual Rate/12)%. For each month: Balance after withdrawal = Previous Balance - Monthly Withdrawal. Then: New Balance = Balance after withdrawal × (1 + Monthly Rate). This repeats for the entire tenure. Profit Earned = Total Amount Withdrawn - Initial Investment.

Benefits of SWP Calculator

• Plan regular monthly income for retirement
• Understand how long your corpus will last
• Compare different withdrawal amounts and rates
• Tax-efficient compared to dividend options
• Flexibility to modify or stop withdrawals anytime

Example Calculation

Investment: ₹5,00,000 | Monthly Withdrawal: ₹1,000 | Return: 8% | Tenure: 5 years
Total Withdrawal: ₹60,000 | Profit Earned: ₹2,30,956 | Remaining Corpus: ₹6,70,956

SWP vs Dividend vs Lump Sum

SWP gives predictable cash flow and is more tax-efficient than dividend options. You decide the withdrawal amount, not the fund house. Unlike lump sum, SWP provides regular income while keeping your money invested.

Taxation on SWP

Each withdrawal consists of capital gains and principal. Capital gains are taxed based on holding period. LTCG on equity funds held for more than 1 year: gains over ₹1 Lakh taxed at 10%. Debt fund withdrawals are taxed as per income slab.