SWP Calculator
Plan your monthly withdrawals from mutual funds — calculate how long your corpus lasts
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📖 Complete Guide to SWP — Systematic Withdrawal Plan in India
A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount regularly from your mutual fund investment — creating a steady income stream. It's the ideal tool for retirees, early retirees, and anyone who wants passive monthly income from their investment corpus.
💰 SWP Monthly Income Examples
| Lumpsum Invested | Monthly Withdrawal | Fund Return | Corpus Lasts | Total Withdrawn |
|---|---|---|---|---|
| ₹10 Lakh | ₹8,000 | 10% | 18 years | ₹17.28 Lakh |
| ₹25 Lakh | ₹15,000 | 10% | 25+ years | ₹45+ Lakh |
| ₹50 Lakh | ₹25,000 | 10% | 30+ years | ₹90+ Lakh |
| ₹1 Crore | ₹50,000 | 10% | 30+ years | ₹1.8+ Crore |
🆚 SWP vs FD vs Dividend — Income Comparison
| Factor | SWP | FD Monthly Interest | Dividend Option |
|---|---|---|---|
| Returns | 8-12% (market-linked) | 6-7% (guaranteed) | Unpredictable |
| Tax Efficiency | High (only gains taxed) | Low (full interest taxed) | Low (taxed at slab) |
| Control | You set the amount | Fixed by bank rate | Fund house decides |
| Capital Growth | Possible if return > withdrawal | Fixed, no growth | Reduces NAV |
| Best For | Tax-efficient income | Guaranteed income | Not recommended |
🎯 SWP Strategy for Retirement
- Build corpus with SIP during working years — then switch to SWP at retirement
- Use the 6% withdrawal rule: Withdraw no more than 6% of corpus annually for sustainable income in India
- Choose Balanced Advantage Funds: They auto-adjust equity/debt allocation, reducing risk
- Keep 1-2 years of expenses in FD: This buffer protects against market downturns
- Review annually: Adjust withdrawal amount based on corpus growth and inflation
💡 Tax Benefits of SWP
SWP is significantly more tax-efficient than FD or dividend income:
- Equity funds (held 1+ year): Only capital gains portion taxed at 10% LTCG (above ₹1 lakh/year) — principal returned tax-free
- Debt funds: LTCG taxed at your income slab after indexation benefit (if held 3+ years)
- vs FD: FD interest is 100% taxable at your income slab (potentially 30%+). For same monthly income, SWP tax can be 5-10x lower
❓ Frequently Asked Questions
Q: What is SWP in mutual funds?
A: SWP (Systematic Withdrawal Plan) is the opposite of SIP. Instead of investing monthly, you withdraw a fixed amount monthly from your mutual fund investment. It's ideal for generating regular income from a lumpsum corpus — especially for retirees.
Q: How does SWP work?
A: You invest a lumpsum in a mutual fund and set up monthly withdrawals. The fund redeems units worth your withdrawal amount each month. The remaining corpus continues to earn returns. If your fund earns more than your withdrawal rate, your corpus can actually grow over time.
Q: How much monthly income can I get from ₹50 Lakh SWP?
A: At 10% annual returns with ₹25,000/month withdrawal from ₹50 Lakh, your corpus can last 30+ years. At ₹35,000/month, it lasts about 20 years. The key is keeping your withdrawal rate below the fund's return rate.
Q: SWP vs FD for monthly income — which is better?
A: SWP offers tax-efficient withdrawals (only gains taxed, not principal) and potentially higher returns (10-12% vs 6-7% FD). FD offers guaranteed income but interest is fully taxable at slab rate. For ₹10 Lakh: FD gives ~₹5,800/month, SWP from a balanced fund can sustain ₹8,000/month for 15+ years.
Q: Is SWP tax-efficient?
A: Yes! In SWP, each withdrawal is a partial redemption of units. Only the capital gains portion is taxed, not the entire amount. For equity funds held 1+ year, LTCG tax is 10% above ₹1 lakh/year. This makes SWP significantly more tax-efficient than FD interest.
Q: Which mutual fund is best for SWP?
A: For SWP, choose funds with consistent returns and low volatility: Balanced Advantage/Hybrid Funds (lower risk, 8-10% returns), Conservative Hybrid Funds (for retirees), or Large Cap Equity Funds (moderate risk, 10-12% returns). Avoid volatile small/mid cap funds for SWP.
Q: Can I do SIP and SWP together?
A: Yes! A popular strategy is SIP during your working years to build a corpus, then switch to SWP after retirement for regular income. You can even run SIP in one fund and SWP from another simultaneously.
Q: What is a safe SWP withdrawal rate?
A: The '4% rule' suggests withdrawing 4% of your corpus annually (adjusted for inflation) for a 30-year retirement. In India, with higher fund returns (10-12%), a 6-8% annual withdrawal rate is often sustainable. Use our calculator to model your specific scenario.
Q: Does SWP corpus get exhausted?
A: It depends on your withdrawal rate vs fund returns. If you withdraw 6%/year and the fund earns 10%/year, your corpus grows. If you withdraw more than the fund earns, it depletes. Our calculator shows exactly when your corpus would exhaust.
Q: How to start SWP in mutual funds?
A: 1) Invest a lumpsum in a mutual fund (minimum ₹25,000-₹1 Lakh depending on AMC). 2) After purchase, set up SWP through the AMC's website or app. 3) Choose withdrawal amount, frequency (monthly/quarterly), and start date. 4) Units are redeemed automatically on the set date.
Q: SWP vs Dividend option — which is better?
A: SWP is better because: 1) You control the withdrawal amount, 2) It's more tax-efficient (LTCG vs dividend tax at slab), 3) Dividends are unpredictable and not guaranteed, 4) SWP from Growth option gives higher corpus appreciation.
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