How inflation changes an SWP
An SWP of ₹10,000 a month feels the same in rupees every month, but its buying power falls each year. At 6% inflation, ₹10,000 buys what about ₹5,600 buys today after ten years. The SWP calculator with inflation divides future values by (1 + inflation) for each year, so the result tells you what you can actually afford.
| After | ₹10,000 is worth (6% inflation) | Needed to buy today’s ₹10,000 |
|---|---|---|
| 5 years | ₹7,473 | ₹13,382 |
| 10 years | ₹5,584 | ₹17,908 |
| 15 years | ₹4,173 | ₹23,966 |
| 20 years | ₹3,118 | ₹32,071 |
| 25 years | ₹2,330 | ₹42,919 |
| 30 years | ₹1,741 | ₹57,435 |
Real return: return minus inflation
A quick way to think about an SWP is the real return — roughly the fund return minus inflation. An 8% fund with 6% inflation has a real return of about 2%. To keep the same buying power for 25 years, your withdrawals need to be sized for that 2% real return, not the 8% headline. That is why plans that look generous in rupees can feel tight later.
Protecting your SWP from inflation
- Add a yearly step-up close to inflation, and size the first withdrawal so the plan still lasts.
- Keep part of the corpus in equity or hybrid funds for long-term growth.
- Review the plan every year and reset the withdrawal if prices rose faster than expected.
Inflation and the SIP years too
If you build your corpus with a SIP first, inflation is working during those years as well. Switch to SIP + SWP and add inflation: the calculator shows what the final balance after the withdrawal years is worth in today’s money.