What is a step-up SWP?
In a step-up SWP the monthly withdrawal grows every year. With ₹20,000 a month and a 5% step-up, you withdraw ₹20,000 a month in year 1, ₹21,000 in year 2, ₹22,050 in year 3 and so on. Some fund houses offer this as a feature; otherwise you can raise the SWP yourself each year. The step up SWP calculator models it so you can see the trade-off before you start.
How step-up shortens a plan
Rising withdrawals use up the corpus faster. Here is ₹25 lakh paying ₹12,000 a month at 8%, with different yearly step-ups:
| Yearly step-up | Lasts (25-year plan) | Withdrawal in year 10 | Total withdrawn |
|---|---|---|---|
| 0% | Full period | ₹12,000 | ₹36,00,000 |
| 3% | Full period | ₹15,657 | ₹52,50,134 |
| 5% | Full period | ₹18,616 | ₹68,72,702 |
| 7% | 20 yr 2 mo | ₹22,062 | ₹59,90,516 |
| 10% | 16 yr 0 mo | ₹28,295 | ₹51,63,696 |
A modest step-up still lasts the full 25 years; a large one runs out years earlier. The sweet spot is usually close to your expected inflation.
Choosing a step-up rate
- Match inflation: 5–6% keeps your income roughly constant in real terms.
- Below inflation: 3% works if some expenses (like a home loan) will end.
- Zero: fine for short goals of a few years.
Step-up with a lower starting amount
If a step-up makes the plan run out too early, start lower. Try reducing the first-year withdrawal in steps of ₹1,000 until the plan lasts the full period — the calculator recomputes instantly, and the year-by-year table shows exactly when each increase kicks in.