What is a Systematic Withdrawal Plan (SWP)?

An SWP Calculator helps you structure a steady monthly income from an accumulated mutual fund corpus. Instead of putting money in every month (like an SIP), an SWP allows you to automatically withdraw a fixed amount every month while the remaining balance continues to stay invested and generate returns.

How Does an SWP Work?

Imagine you have $100.0K in a mutual fund generating 10% annually. If you set up an SWP to withdraw $800 a month, the mutual fund company simply sells $800 worth of your units every month and deposits the cash into your bank account. Because your remaining balance is still growing at 10%, your capital depletion is heavily minimized—or even prevented entirely if your withdrawal rate is lower than your return rate.

The SWP Formula

The math requires calculating the compounding growth of the balance while simultaneously subtracting the monthly withdrawal:

End Balance = (Previous Balance × (1 + Monthly ROI)) - Monthly Withdrawal

Why Retirees Love SWP

Tax Efficiency: When you withdraw via SWP, you are selling units. Only the "capital gains" portion of the withdrawal is taxed, not the principal. This makes it far more tax-efficient than bank Fixed Deposit interest.
Inflation Protection: Because the unwithdrawn money remains invested in equity or hybrid funds, it has the potential to beatinflation over the long term.
Flexibility: You can start, stop, increase, or decrease your monthly withdrawal amount at any time without penalty.