A Systematic Withdrawal Plan (SWP) is the reverse of a SIP: invest a corpus once and withdraw a fixed amount every month, while the remaining balance stays invested and earns returns. Popular for generating regular retirement income.
About the SWP Calculator
SWPs from debt or hybrid funds can be more tax-efficient than fixed deposits because only the gain portion of each withdrawal is taxed as capital gains. If your withdrawal rate is below the portfolio's return rate, the corpus can theoretically last forever.
Formula used:
Frequently Asked Questions
What monthly withdrawal rate is sustainable?
If your annual withdrawal rate is below the portfolio's annual return, the corpus grows. A commonly cited safe withdrawal rate is 3–4% of corpus per year.
Is SWP better than an FD for monthly income?
SWPs can be more tax-efficient and offer higher returns, but unlike FDs the returns are not guaranteed. Use a conservative return assumption when planning.