How to use the SWP calculator
- Enter the amount you are investing in the fund.
- Set the monthly amount you want to withdraw.
- Enter a conservative expected return and how many years the money must last.
- Optionally raise the withdrawal each year to keep up with inflation.
- Read the balance each year, the month the money runs out (if it does) and the maximum sustainable withdrawal.
SWP formula
Balance after n months = P × (1 + i)n − W × [(1 + i)n − 1] ÷ i
P is the amount invested, W the monthly withdrawal and i the yearly return ÷ 12. Setting the balance to zero gives the largest withdrawal that lasts n months: W = P × i ÷ [1 − (1 + i)−n].
How long ₹50 lakh lasts
| Withdrawal | 6% return | 8% return | 10% return |
|---|---|---|---|
| ₹25,000 a month | 50+ years | 50+ years | 50+ years |
| ₹35,000 a month | 21 yrs | 38 yrs 3 mo | 50+ years |
| ₹50,000 a month | 11 yrs 7 mo | 13 yrs 10 mo | 18 yrs |
| ₹75,000 a month | 6 yrs 10 mo | 7 yrs 5 mo | 8 yrs 2 mo |
Maximum monthly withdrawal from ₹1 crore
| Period | 7% return | 8% return | 8%, rising 5% a year (start) |
|---|---|---|---|
| 10 years | ₹1,16,108 | ₹1,21,328 | ₹99,592 |
| 15 years | ₹89,883 | ₹95,565 | ₹71,379 |
| 20 years | ₹77,530 | ₹83,644 | ₹57,439 |
| 25 years | ₹70,678 | ₹77,182 | ₹49,207 |
| 30 years | ₹66,530 | ₹73,376 | ₹43,827 |
The step-up column is the first year's amount; it then rises 5% each year. To build the corpus first, use the SIP calculator.
Frequently asked questions
What is a systematic withdrawal plan (SWP)?
An SWP lets you redeem a fixed amount from a mutual fund every month or quarter while the rest stays invested. It is often used for a regular income in retirement from a lumpsum corpus.
How is SWP calculated?
Each month the balance grows at the expected return ÷ 12, and then the withdrawal is taken out. If the withdrawal is more than what the balance earns, the corpus shrinks; if it is less, the corpus keeps growing.
How is SWP taxed?
Only the gains part of each withdrawal is taxed, not the capital. For equity funds, gains on units held 12 months or less are taxed at 20%, and longer-held gains at 12.5% above ₹1.25 lakh a year. Gains on debt funds bought on or after 1 April 2023 are taxed at your slab rate.
Is TDS deducted on SWP for resident investors?
No. Mutual funds do not deduct TDS on capital gains for resident individuals; you pay the tax yourself when you file your return, or through advance tax if it is large enough.
What is a safe withdrawal rate?
There is no single answer. If you withdraw less each year than the fund earns after inflation, the corpus lasts indefinitely. The calculator shows the largest monthly amount that lasts your chosen period and the amount that keeps the capital intact.
Should I increase my SWP every year?
If you rely on it for living costs, yes: at 6% inflation, a fixed ₹30,000 buys only about ₹16,700 worth of goods after 10 years. Use the yearly increase setting to see whether the corpus can support it.