SWP Calculator

Plan Your Monthly Mutual Fund Income and Fund Longevity

Calculation Examples

Calculation Case Result
$100k Capital, Withdraw $1k/mo (8% return) Lasts ~13 years
$500k Capital, Withdraw $2k/mo (6% return) Lasts indefinitely (Growth > Payout)
Remaining Balance after 10 years ($250k cap) Depends on market yield vs inflation

How to Use the SWP Calculator?

To start planning your income, enter the total investment amount (corpus), the amount you wish to withdraw periodically, and the expected annual return rate. You can choose the withdrawal frequency, though monthly is most common for retirees.

Click "Calculate" to see a detailed breakdown of how long your funds will last and what the final balance will be. This systematic withdrawal plan tool helps you create a sustainable cash flow without liquidating your entire portfolio at once, allowing the remaining balance to continue growing.

How SWP Calculations Work

SWP calculations don’t give account for fund depletion if compound growth is applied to the balance and withdrawals are subtracted. This contracts devaluation future payouts, adjusted for inflation, to maintain expected value. The formula uses expected returns, generally 6-12% for mutual funds regardless of the possible value abnormality through market volatility, and provide a clear expectation of how the corpus may last.Difference between SIP and SWP

Useful Tips 💡

  • Use a conservative return rate (6-8 percent) to avoid overestimating your fund's life.
  • Factor in inflation by either increasing your initial corpus or lowering your expected return.

📋Steps to Calculate

  1. Enter your total invested amount and anticipated rate of return.

  2. Enter your regular amount and frequency of withdrawal (monthly, etc.).

  3. Press calculate and your result will be displayed.

Mistakes to Avoid ⚠️

  1. Withdrawing a fixed amount without considering market returns - may deplete corpus too fast.
  2. Forgetting inflation adjustment - real purchasing power drops over time.
  3. Setting withdrawal rate > 6–7% annually - high risk of running out of money.
  4. Not accounting for taxes on withdrawals (especially in non-tax-advantaged accounts).

Practical Applications📊

  1. Plan retirement funds with consistent mutual fund distributions.

  2. Make adjustments due to inflation so the distributions are sustainable.

  3. Evaluate SWP versus lump sum for the best decisions.

Questions and Answers

What is a systematic withdrawal plan?

A systematic withdrawal plan (SWP) allows an investor to withdraw a fixed amount every month, quarterly, etc., from their mutual funds while the rest of the corpus continues to appreciate in value. An SWP would be useful for retirees or anyone withdrawing from their savings who needs to withdraw a consistent amount of income without liquidating the entire investment. Also, unlike a lump sum withdrawal, it is tax-efficient on the capital gains, as the amounts being withdrawn, if any, are considered from the original investment.

How to calculate an SWP for mutual funds?

To calculate an SWP, type in the total corpus (investment amount), withdrawal amount, expected annual return rate (investors expect a return of 8-10%), and how frequently you expect to take the withdrawal (monthly, quarterly or annually) into the calculator. If you wish, you may include an annual inflation expectation, although we suggest for more complex plans the inflation is only considered once in the initial range (example 6%). The SWP calculator can project how long withdrawals can last and/or what the remaining balance will be over time, which can assist in making sound and sustainable withdrawals for your goals, such as retirement.

Why use an SWP calculator that includes inflation?

An SWP calculator that considers inflation and rising living costs will adjust future withdrawals so our expected finished product remains relevant concerning expenses affecting the products. When an investor is using an SWP calculator and they are studying results, with the inflation expectation we observed above (considering 6%), the annual payouts would increase to maintain our expenses. It is critical an investor clearly understands how inflation impacts their lifestyle, especially considering yesterdays dollars are non-relevant to todays expectations. This aspect is also very relevant for retirees in long-term financial plans suggesting a lifestyle away we may not suggest a monetization.

How is SWP different from SIP?

A SIP (Systematic Investment Plan) is for putting money into a fund to build wealth. An SWP is for taking money out of a fund to provide income.

Is SWP income taxable?

In many regions, only the capital gains portion is taxable, making it tax-efficient.

Can I change my SWP amount later?

Yes, most mutual funds allow you to modify the withdrawal amount and frequency at any time.

What formulas does the SWP Calc use?

The calculator uses: $$\text{Balance}_{new} = \text{Balance}_{old} \times (1 + \frac{r}{12}) - W$$ where $r$ is the annual return rate and $W$ is the monthly withdrawal. For inflation-adjusted plans, $W$ increases by $(1 + r_{inf})$ annually.

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Disclaimer: This calculator is designed to provide helpful estimates for informational purposes. While we strive for accuracy, financial (or medical) results can vary based on local laws and individual circumstances. We recommend consulting with a professional advisor for critical decisions.