Finance · Free tool
SWP Calculator
A Systematic Withdrawal Plan pays you a fixed monthly amount from a corpus that continues to earn returns. Useful for retirement income from mutual funds.
Year-by-year balance
| Year | Withdrawn | Remaining |
|---|---|---|
| 1 | ₹4,80,000 | ₹49,17,000 |
| 2 | ₹4,80,000 | ₹48,27,112 |
| 3 | ₹4,80,000 | ₹47,29,763 |
| 4 | ₹4,80,000 | ₹46,24,334 |
| 5 | ₹4,80,000 | ₹45,10,154 |
| 6 | ₹4,80,000 | ₹43,86,498 |
| 7 | ₹4,80,000 | ₹42,52,578 |
| 8 | ₹4,80,000 | ₹41,07,543 |
| 9 | ₹4,80,000 | ₹39,50,470 |
| 10 | ₹4,80,000 | ₹37,80,360 |
| 11 | ₹4,80,000 | ₹35,96,131 |
| 12 | ₹4,80,000 | ₹33,96,611 |
| 13 | ₹4,80,000 | ₹31,80,531 |
| 14 | ₹4,80,000 | ₹29,46,516 |
| 15 | ₹4,80,000 | ₹26,93,079 |
| 16 | ₹4,80,000 | ₹24,18,606 |
| 17 | ₹4,80,000 | ₹21,21,352 |
| 18 | ₹4,80,000 | ₹17,99,426 |
| 19 | ₹4,80,000 | ₹14,50,780 |
| 20 | ₹4,80,000 | ₹10,73,197 |
| 21 | ₹4,80,000 | ₹6,64,275 |
| 22 | ₹4,80,000 | ₹2,21,412 |
How an SWP works
A Systematic Withdrawal Plan instructs the AMC to redeem a fixed rupee amount from your mutual fund holdings on the same day each month. NAV at the withdrawal date determines how many units are sold. As long as the corpus grows faster than the withdrawal rate, the balance compounds; if not, units deplete and the corpus eventually runs out. Withdrawals are treated as redemptions — LTCG/STCG tax applies, but a small monthly redemption typically stays inside the ₹1.25 lakh LTCG exemption for equity mutual funds.
Worked example
Retired Pune accountant has ₹1 crore in a hybrid equity fund (long-term expected return 10% p.a.). She sets up an SWP of ₹60,000/month— an annualised withdrawal rate of 7.2%. With monthly compounding at 10% and ₹60k pulled out, the corpus is projected to last ~28 years— through her expected lifespan with a margin. At ₹80,000/month (9.6% withdrawal rate) it depletes in ~17 years; at ₹50k/month (6%) it actually grows over time.
When to set up an SWP
- Retirement income replacement — cleaner than dividend plans (which are slab-taxed now)
- Bridge between FD maturity and pension start — controlled drawdown
- NRI returning to India needs monthly INR cash flow from accumulated MF corpus
- Avoiding the 30% TDS that some dividend payouts attract since FY 2020-21
The classic rule of thumb is to keep withdrawal rate below 6%for indefinite sustainability (the “safe withdrawal rate” for India is lower than the US 4% because of higher inflation but offset by higher nominal returns). Pair with SIP calculator for the accumulation phase, and inflation calculator to size the withdrawal in today's rupees.
FAQ
Is SWP from mutual funds tax-efficient?
Yes, more than dividends. Each SWP redemption is a partial sale — only the gain portion is taxed. Compared to dividend payout where the entire dividend is taxed at slab, SWP shifts to capital gains rates (12.5% LTCG, 20% STCG for equity).
What return assumption should I use for SWP?
For equity funds: 10-11% (conservative long-term). For hybrid: 8-9%. For debt: 7%. Plan for the conservative number — SWP that depletes corpus by year 25 at 12% return depletes by year 17 at 7%.
When should I start an SWP?
Once you have a built corpus and need predictable monthly income — typical use case is retirement. Start at age 60+. Pre-retirement SWPs erode the compounding base.