How to use the SWP Calculator
- Choose SWP only if you already have a corpus, or SIP + SWP to build one first.
- Enter the total investment (or your monthly SIP and its period), the monthly withdrawal, the withdrawal period and the return you expect.
- Optionally add a yearly step-up — to raise the withdrawal each year — and inflation, to see values in today’s money.
- Press Calculate SWP. You get the final value, total withdrawn, returns earned, the maximum level SWP for your period and a year-by-year table.
What is a systematic withdrawal plan?
An SWP is the reverse of a SIP. Instead of investing a fixed amount every month, you redeem a fixed amount from a mutual fund every month. The money that is not withdrawn stays invested and keeps earning returns, so a well-sized SWP can pay you for many years — and still leave a balance at the end. Retirees use SWPs for a monthly “salary”, and others use them to fund school fees, rent or EMIs from a lump sum.
The SWP formula
The SWP calculator works month by month. With an annual return r, the monthly rate is i = r ÷ 12. Each month the withdrawal is taken first and the remaining balance grows: balance = (balance − withdrawal) × (1 + i). The largest level withdrawal that uses up a corpus P exactly over n months is P × i ÷ [(1 − (1 + i)−n) × (1 + i)].
How long ₹10 lakh lasts
At an 8% annual return, here is how different monthly withdrawals from ₹10,00,000 behave:
| Monthly SWP | Lasts (20-year plan) | Left after 10 years |
|---|---|---|
| ₹5,000 | Full period | ₹12,98,812 |
| ₹7,500 | Full period | ₹8,38,398 |
| ₹8,500 | 19 yr 0 mo | ₹6,54,232 |
| ₹10,000 | 13 yr 8 mo | ₹3,77,983 |
| ₹12,000 | 10 yr 1 mo | ₹9,652 |
| ₹15,000 | 7 yr 4 mo | Ran out |
Withdrawing ₹5,000 a month — less than the corpus earns — leaves more than you started with. At ₹15,000 a month the money runs out in under eight years.
How SWP withdrawals are taxed in India
Each SWP payment redeems units, and only the gain on those units is taxed — the part that is your own capital coming back is not. Units are redeemed first-in, first-out. Under the rules in force from 23 July 2024:
- Equity-oriented funds: units held over 12 months — long-term capital gains taxed at 12.5% above ₹1.25 lakh of such gains a year; units held 12 months or less — short-term gains taxed at 20%.
- Debt funds bought on or after 1 April 2023: gains are added to your income and taxed at your slab rate, however long you hold them.
Tax rules change with Union Budgets, so check the current rules or ask a tax adviser before planning withdrawals.