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SWP Calculator

A systematic withdrawal plan pays you a fixed amount every month from a lump sum that stays invested. Enter your investment, monthly withdrawal and expected return to see how long the money lasts, how much you withdraw in total and what is left at the end.

How to use this calculator

  1. Enter the lump sum you will invest, for example a retirement corpus or a bonus.
  2. Enter the amount you want every month.
  3. Enter a realistic yearly return for the fund you will use.
  4. Choose the period, and optionally raise the withdrawal every year to keep up with inflation.

Formula

Balance(next month) = Balance × (1 + r ÷ 12) − W

r
expected annual return as a decimal
W
monthly withdrawal, raised each year if you set an increase

The level withdrawal that lasts exactly n months is W = P × i ÷ (1 − (1 + i)^−n), with i = r ÷ 12.

Worked example

₹25,00,000 invested at 8% a year, withdrawing ₹20,000 every month for 15 years.

  1. Total withdrawn180 × ₹20,000 = ₹36,00,000
  2. Returns earnedabout ₹24,46,539
  3. Lasts exactly 15 years atabout ₹23,891 a month

After 15 years you have withdrawn ₹36 lakh and about ₹13,46,539 is still invested. If the withdrawal rises 6% a year instead, the money lasts about 12 years and 3 months.

How an SWP works

You invest a lump sum in a mutual fund and instruct it to sell enough units every month to pay you a fixed amount. The money you have not yet withdrawn keeps earning returns. If the monthly withdrawal is less than what the balance earns, the corpus can even grow while it pays you.

The calculator shows a second useful number: the largest monthly amount that lasts exactly your chosen period. Withdraw more than that and the money runs out early; withdraw less and something is left over.

Plan for inflation

₹20,000 a month buys less every year. If you raise the withdrawal by 5% or 6% each year to keep the same lifestyle, the corpus runs out much sooner. In the example below, a ₹25 lakh corpus that would last more than 15 years at a flat ₹20,000 a month lasts only about 12 years if the withdrawal grows 6% a year.

Returns are not steady either. A fall in the market in the first few years hurts an SWP more than a fall later, because you are selling units at low prices. That is why most people use debt or hybrid funds for withdrawals and keep a year or two of expenses in a fixed deposit.

Tax on SWP withdrawals

Only the gain inside each withdrawal is taxed, not the whole amount, because part of every withdrawal is your own money coming back. For equity funds, long-term gains above ₹1.25 lakh a year are taxed at 12.5% after one year. Gains on debt funds bought after April 2023 are taxed at your slab rate. This often makes an SWP more tax-efficient than FD interest, which is taxed in full.

To build the corpus in the first place, use the SIP calculator.

Things to keep in mind

  • The calculator assumes a steady return every month. Real fund returns vary, so treat the result as a planning estimate.
  • Exit loads may apply to withdrawals in the first year of some funds.
  • An SWP has no guaranteed income; for a guaranteed pension, compare annuities or the Senior Citizens' Savings Scheme.

Frequently asked questions

How much can I withdraw monthly from ₹1 crore?

At 8% a year, about ₹83,600 a month lasts exactly 20 years, and about ₹66,700 a month (8% ÷ 12) never touches the principal. With inflation-linked increases the safe starting amount is lower. Enter your own figures above.

Is SWP better than FD interest?

An SWP can be more tax-efficient because only the gain in each withdrawal is taxed, and returns may be higher. An FD gives a guaranteed rate. Many retirees use both.

What happens if the money runs out?

Withdrawals stop when the balance reaches zero. The calculator shows when that would happen, so you can lower the withdrawal, the yearly increase or the period.

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