SWP Calculator
Simulate regular monthly cash withdrawals from a corpus while preserving capital growth.
SWP Cashflow Parameters
Configure your investment corpus and desired monthly cash flow
Key Investment Insights
- Maintain a prudent withdrawal rate of 5% to 7% per annum so your remaining corpus continues growing ahead of inflation.
- SWP is highly tax-advantaged: Only the capital gain component within each monthly unit redemption is subject to capital gains tax.
- Keep 1-2 years of living expenses in ultra-short debt / liquid funds to prevent selling equity units during temporary bear markets.
- Review withdrawal amounts every 2-3 years to calibrate for inflation without depleting capital.
| Year | Opening Balance | Annual Withdrawal | Interest / Growth | Closing Balance |
|---|---|---|---|---|
| Year 1 | ₹ 50,00,000 | -₹ 4,20,000 | +₹ 5,03,770 | ₹ 50,83,770 |
| Year 2 | ₹ 50,83,770 | -₹ 4,20,000 | +₹ 5,12,542 | ₹ 51,76,313 |
| Year 3 | ₹ 51,76,313 | -₹ 4,20,000 | +₹ 5,22,233 | ₹ 52,78,545 |
| Year 4 | ₹ 52,78,545 | -₹ 4,20,000 | +₹ 5,32,938 | ₹ 53,91,483 |
| Year 5 | ₹ 53,91,483 | -₹ 4,20,000 | +₹ 5,44,764 | ₹ 55,16,247 |
| Year 6 | ₹ 55,16,247 | -₹ 4,20,000 | +₹ 5,57,828 | ₹ 56,54,075 |
| Year 7 | ₹ 56,54,075 | -₹ 4,20,000 | +₹ 5,72,261 | ₹ 58,06,336 |
| Year 8 | ₹ 58,06,336 | -₹ 4,20,000 | +₹ 5,88,204 | ₹ 59,74,541 |
| Year 9 | ₹ 59,74,541 | -₹ 4,20,000 | +₹ 6,05,818 | ₹ 61,60,358 |
| Year 10 | ₹ 61,60,358 | -₹ 4,20,000 | +₹ 6,25,275 | ₹ 63,65,633 |
| Year 11 | ₹ 63,65,633 | -₹ 4,20,000 | +₹ 6,46,770 | ₹ 65,92,403 |
| Year 12 | ₹ 65,92,403 | -₹ 4,20,000 | +₹ 6,70,516 | ₹ 68,42,919 |
| Year 13 | ₹ 68,42,919 | -₹ 4,20,000 | +₹ 6,96,748 | ₹ 71,19,667 |
| Year 14 | ₹ 71,19,667 | -₹ 4,20,000 | +₹ 7,25,727 | ₹ 74,25,395 |
| Year 15 | ₹ 74,25,395 | -₹ 4,20,000 | +₹ 7,57,741 | ₹ 77,63,136 |
Financial Formula & Mechanics
Mathematical principles behind this model
A Systematic Withdrawal Plan (SWP) generates predictable monthly pension-like cash flows from your mutual fund investments. Because withdrawals are redeemed as capital units rather than pure interest, SWP offers superior tax efficiency compared to traditional bank fixed deposits or annuities.
Frequently Asked Questions
How is SWP more tax-efficient than Fixed Deposit interest or Dividends?
FD interest is taxed at your peak marginal income tax slab (up to 30%+ surcharge). In contrast, SWP withdrawals comprise partly of your own principal (zero tax) and partly of capital gains. Equity long-term capital gains enjoy a ₹1.25 Lakh annual exemption and an attractive 12.5% flat rate thereafter.
Can I increase or stop the monthly SWP amount if my needs change?
Yes. SWP provides 100% liquidity. You can adjust the monthly payout amount, change frequency (monthly/quarterly), pause, or withdraw a lumpsum whenever required.
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