What is a SWP Calculator?
A Systematic Withdrawal Plan (SWP) is the mirror image of a SIP: instead of investing every month, you redeem a fixed amount from an existing corpus every month, while the rest stays invested and keeps earning returns. It's commonly used to generate a regular "income" in retirement without fully liquidating a portfolio at once.
Enter your starting corpus, the monthly amount you plan to withdraw, and an expected return — the calculator simulates the balance month by month and flags whether (and when) it would run out.
How the balance is projected
Each month the remaining balance earns the monthly return first, then the withdrawal is deducted. This is simulated month by month rather than with a single formula, so it correctly shows if and when the corpus is fully depleted.
Worked example: how the withdrawal amount changes the outcome
Starting with a ₹20,00,000 corpus at an assumed 8% annual return, withdrawing ₹10,000 a month for 20 years takes out ₹24,00,000 in total — and the corpus still grows, reaching roughly ₹39,63,401 by the end, because that withdrawal rate (6% a year) sits comfortably below the assumed return. Push the withdrawal to ₹13,333 a month — which happens to equal the corpus’s monthly interest at 8%, an 8% annual withdrawal rate — and the corpus roughly holds its ground, ending near ₹20,00,196: you’re withdrawing almost exactly what it earns.
At ₹15,000 a month (a 9% annual withdrawal rate), the corpus still lasts the full 20 years but declines to about ₹10,18,299. Push to ₹20,000 a month (12% annually) and the corpus runs out entirely around month 166 — roughly 13.8 years in, well short of the 20-year target.
Finding your own sustainable withdrawal rate
The pattern above is the core SWP decision: a monthly withdrawal that stays below your assumed return (expressed as a monthly rate) can, in principle, continue indefinitely without depleting the corpus, while anything meaningfully above it is a matter of when — not if — the money runs out. A commonly cited starting point for a multi-decade SWP is withdrawing 4–6% of the corpus annually, though the right number for you depends on your actual expected return, how long the corpus needs to last, and how much buffer you want against a few bad years along the way.
Sequence-of-returns risk — what a constant-rate projection can’t show
This calculator assumes the same annual return every single year, but real portfolios don’t grow smoothly — and a SWP is especially sensitive to *when* the bad years happen, not just how many there are. A sharp market fall early in withdrawal, while the corpus is still large and you’re pulling a fixed rupee amount out of it, does far more damage than the same fall happening a decade in, after growth has built a bigger buffer.
This is called sequence-of-returns risk, and it’s a genuine limitation of any single-average-return SWP projection, including this one. Treat the result here as a reasonable planning estimate under smooth returns, not a guarantee that a real, volatile portfolio behaves the same way.
Frequently asked questions
What withdrawal rate is considered sustainable?
A common rule of thumb is withdrawing no more than 4–6% of the corpus annually if you want it to last multiple decades, though the right number depends heavily on your actual expected return and time horizon.
What happens if my withdrawal exceeds the return?
The balance shrinks over time and will eventually hit zero — the calculator shows the month this happens, if it happens within your chosen period.
Are SWP withdrawals taxed?
Each withdrawal is treated as a partial redemption and taxed as capital gains on the gain portion, not the full amount — the applicable rate depends on the fund type and holding period.
Can I change my withdrawal amount after starting an SWP?
Yes — most platforms let you modify, pause, or stop an SWP mandate at any time, unlike some fixed-tenure schemes.
Is SWP only useful for retirees?
No — it suits anyone who wants a regular cash flow from an existing corpus, including for a sabbatical, funding a child’s education year by year, or supplementing income at any life stage, not exclusively retirement.
SWP vs. a bank RD/FD for regular income — which is better?
An FD with periodic interest payout gives a fixed, guaranteed amount but no growth potential and fully taxable interest. An SWP from a mutual fund offers potentially better long-run outcomes and more favourable capital-gains tax treatment, but with market risk and no guarantee — the trade-off is guaranteed-but-lower versus variable-but-potentially-higher.
Does it make sense to start an SWP right after a market downturn?
Starting withdrawals when the corpus value is already depressed is one of the clearer examples of sequence-of-returns risk in action — each withdrawal removes a larger share of a smaller base. Where you have flexibility on timing, starting (or increasing withdrawals) after a recovery rather than during a downturn meaningfully improves how long a corpus lasts.