SWP Calculator
Calculate your Systematic Withdrawal Plan payouts
See how much monthly income your mutual fund corpus can pay out, how much is left at the end of the term, and whether your money runs out before the term does.
What is an SWP?
A Systematic Withdrawal Plan (SWP) is the mirror image of a SIP. Instead of putting a fixed amount into a mutual fund every month, you take a fixed amount out every month. The fund redeems just enough units to fund your payout, and whatever remains stays invested and keeps earning.
This makes SWP the standard way Indian retirees turn a lump sum — a PF payout, a matured FD, the proceeds of a property sale — into a predictable monthly income without pulling everything out of the market at once.
The tension at the heart of every SWP is simple: your corpus grows at the fund's return rate and shrinks at your withdrawal rate. Whichever is larger wins. Withdraw less than the corpus earns and your capital grows while paying you. Withdraw more and you are eating into the principal — the calculator above tells you exactly when the last rupee leaves.
How to Use This SWP Calculator
- Enter your total investment — the lump sum corpus you are starting with
- Set the monthly withdrawal you want to receive
- Set the expected return rate — balanced and hybrid funds used for SWP typically assume 8-10%, equity funds 10-12%
- Choose the time period you need the income for
- Check the final balance and the year-by-year breakdown. If a red warning appears, your withdrawal is too aggressive for the corpus
SWP Formula
Where:
- P = Initial corpus invested
- W = Fixed monthly withdrawal
- i = Monthly rate of return (annual rate / 12 / 100)
- n = Total number of months
Example: Invest ₹10,00,000 at 8% p.a. and withdraw ₹8,000/month for 10 years. You receive ₹9,60,000 in total payouts and still hold roughly ₹7,56,072 at the end — the corpus earned ₹7,16,072 while paying you.
Note that this closed form breaks down the moment the corpus runs dry: it keeps subtracting withdrawals and returns a negative balance that cannot happen in reality. This calculator simulates the plan month by month instead, so it stops at zero and reports the month the money actually ran out.
How Much Can You Safely Withdraw?
The break-even withdrawal is simply the monthly return on your corpus: corpus × annual rate / 12. At 8% p.a., a ₹10,00,000 corpus throws off about ₹6,667 a month. Withdraw exactly that and your capital never moves. Withdraw ₹8,000 and you dip into principal slowly enough that it still lasts decades. Withdraw ₹20,000 and it is gone in under three years.
The widely cited 4% rule suggests withdrawing 4% of your corpus per year (about 0.33% per month) to make it last indefinitely. Indian advisers often stretch this to 5-6% given higher nominal returns, though higher inflation cuts the other way. The safest approach is to keep your withdrawal at or below what the corpus earns, and treat anything above that as a deliberate, time-boxed decision.
Why SWP Beats Dividend (IDCW) Plans on Tax
Both an SWP and an IDCW (dividend) plan give you periodic cash from a mutual fund, but they are taxed very differently.
An IDCW payout is added to your total income and taxed at your slab rate — up to 30% plus surcharge for higher earners. An SWP withdrawal is a redemption, so only the capital gain embedded in the units you sold is taxable, not the entire amount you received. In the early years of an SWP, most of each withdrawal is your own capital coming back, which is not taxed at all.
For equity funds, long-term gains (units held over 12 months) above ₹1.25 lakh per year are taxed at 12.5%, and short-term gains at 20%. For debt funds purchased on or after 1 April 2023, gains are taxed at your slab rate regardless of holding period. You also control the amount and timing with an SWP, which an IDCW plan never gives you.
SWP Tips
- Start below the earning rate: If your fund returns 8%, keep withdrawals under 8% annually and the corpus survives any market cycle
- Use hybrid or balanced funds: Pure equity is volatile, and withdrawing during a crash locks in losses — hybrid funds smooth this out
- Wait 12 months before starting: Withdrawals after the first year qualify as long-term capital gains on equity funds, cutting the rate from 20% to 12.5%
- Keep a cash buffer: One to two years of withdrawals in a liquid fund means you never have to redeem equity units in a downturn
- Review annually: Inflation erodes a fixed withdrawal — revisit the amount each year rather than setting it once and forgetting it