SWP Calculator

How to use the SWP calculator

Enter the corpus you have invested (or plan to invest) in a mutual fund, the amount you want to withdraw every month, the return you expect the remaining money to earn and the number of years you want the income to last. The calculator shows the value left at the end, the total withdrawn and the returns earned along the way. If withdrawals are too high, it tells you exactly when the money runs out. Two benchmarks help you set the withdrawal: the amount that spends only the returns and keeps your capital intact, and the maximum level withdrawal that uses up the corpus exactly at the end of the period.

Use the yearly increase field to model a withdrawal that rises with inflation — essential for retirement income lasting 20–30 years.

How SWP is calculated

The calculator simulates the plan month by month. Each month the balance earns one month's return, then the withdrawal is redeemed:

Here r is the expected annual return and W the monthly withdrawal. The withdrawal that keeps capital intact is simply Corpus × r ÷ 12, and the level withdrawal that exhausts the corpus in n months is the loan-EMI formula run in reverse:

Worked example

Invest ₹10 lakh and withdraw ₹10,000 a month for 10 years, assuming 8% a year. You take out ₹12 lakh in total — more than you put in — and still have about ₹3.9 lakh left at the end, because the balance keeps earning while you withdraw. To spend only the returns you could take about ₹6,667 a month; to use up the whole ₹10 lakh in exactly 10 years you could take about ₹12,133 a month. Increase the ₹10,000 withdrawal by 6% a year and the corpus lasts about 9 years and 7 months instead.

Why investors use SWP

• Regular income for retirees, from a debt, hybrid or balanced advantage fund, without locking money into an annuity.
• Tax efficiency. Each withdrawal is a redemption of units, so only the gain portion of each withdrawal is taxed — unlike FD interest, which is fully taxable every year. For equity funds held over 12 months, long-term gains up to ₹1.25 lakh a year are tax-free and the rest taxed at 12.5%. For debt funds bought after 1 April 2023, gains are taxed at your slab rate.
• Flexibility. You can change, pause or stop the SWP at any time, and the remaining corpus stays invested.

Tips for a sustainable SWP

• Keep withdrawals modest. For a 25–30 year retirement, an initial yearly withdrawal of around 3.5–4.5% of the corpus, rising with inflation, has a good chance of lasting in a balanced portfolio.
• Mind sequence risk. A market fall in the first years of withdrawals hurts far more than one later. Keep 2–3 years of withdrawals in a liquid or short-duration fund.
• Build the corpus first. Use the SIP calculator or step-up SIP calculator to plan how much you need, and the retirement calculator to check the full picture.
• Exit loads. Many equity funds charge 1% if units are redeemed within a year — start SWPs on older units.

Returns from mutual funds are market-linked and not guaranteed. These projections assume a constant return and are estimates, not investment advice.