SWP (Systematic Withdrawal Plan) Calculator

About – SWP (Systematic Withdrawal Plan) Calculator

What is a Systematic Withdrawal Plan (SWP)?

A Systematic Withdrawal Plan (SWP) is a facility offered by mutual funds that allows investors to withdraw a fixed amount of money at regular intervals from their existing investments. It helps create a steady cash flow by redeeming units of mutual funds periodically while the remaining investment continues to grow.

What is an SWP Calculator?

An SWP calculator is a financial tool that helps investors estimate the monthly or periodic withdrawals they can make from their mutual fund investments. It also shows how long the corpus will last or how much will remain after a specific period based on the withdrawal rate.

How to Use the SWP Calculator?

• Enter the total investment amount (initial corpus).
• Specify the expected annual return rate (in %).
• Choose the fixed withdrawal amount you want every month or quarter.
• Select the duration (in years or months) for which you plan to withdraw.
• Click "Calculate" to view the results.

Who Can Use This Calculator?

This calculator is ideal for retirees, individuals planning for regular income, financial planners, or anyone who wants to plan a withdrawal strategy from their mutual fund corpus while keeping their capital intact or minimizing depletion.

Benefits of Using an SWP Calculator

• Helps plan a steady income stream post-retirement.
• Shows the impact of withdrawals on the remaining investment corpus.
• Assists in tax-efficient withdrawal planning.
• Enables better financial planning for long-term goals and expenses.

How Can an SWP Calculator Assist You?

An SWP calculator can help you understand how long your investment will last, how much you can safely withdraw without depleting your corpus too early, and how market returns will influence your future withdrawals. This allows for better budgeting and retirement income planning.

Example of a Systematic Withdrawal Plan

Suppose you have invested ₹10,00,000 in a mutual fund and expect an annual return of 8%. You wish to withdraw ₹10,000 every month. Using the SWP calculator, you can find out how many months this amount will last, or how much balance will remain after, say, 10 years of monthly withdrawals.

Example of Systematic Withdrawal Plan

As mentioned before, the SWP allows investors to generate both monthly revenue as well as an accumulated sum at the end of the maturity period. Refer to this investment and withdrawal schedule for an in-depth idea.

Here, an individual has invested Rs. 50,000 for a tenure of 1 year along with a systematic withdrawal of Rs. 1,000 per month. Interest rate stands at 10% annually (compounded monthly).

As such, the total return on investment after the end of the tenure stands at Rs. 4,565.

How to Use an SWP Calculator?

• Step 1: Enter the total investment amount (e.g., Rs. 50,000).
• Step 2: Provide the expected annual interest rate (e.g., 10%).
• Step 3: Set the withdrawal amount (e.g., Rs. 1,000 monthly).
• Step 4: Choose the duration (e.g., 12 months).
• Step 5: Click "Calculate" to view the monthly breakdown of withdrawals, interest, and balance.

Note:

The actual interest earned may vary based on the compounding frequency and market conditions. The calculator provides an estimated projection to assist in planning withdrawals effectively.