SWP calculator

What an SWP is

A systematic withdrawal plan (SWP) turns a mutual fund corpus into a regular income. You tell the fund house to pay a fixed amount to your bank account every month (or quarter), and it sells just enough units each time. The rest stays invested and keeps earning. It is the opposite of a SIP: a SIP builds the corpus, an SWP spends it slowly.

Whether the money lasts depends on three things: how much you take, what the fund earns, and how long you need it. Take a little less than the fund earns and the corpus can last for decades; take much more and it runs out.

Ramasamy's retirement in Kallakurichi

Ramasamy retired from a cooperative bank in Kallakurichi in 2026 with ₹50 lakh. He puts it in a hybrid fund he expects to earn 8% a year and takes ₹30,000 a month, raised by 5% every year to keep up with prices.

His first-year withdrawal is ₹3.6 lakh, or 7.2% of the corpus. That is high: a study of Indian portfolios from 2000 to 2023 (Raju and Saraogi, 2024) found that about 3% a year, rising with inflation, was the safe rate, with about 40% in equity. Ramasamy can take less, start a few years later, or accept a smaller income in later years.

How to use this tool

1. Pick My withdrawal to test a plan, or Most I can take to find the highest withdrawal that lasts.
2. Type your corpus and the monthly withdrawal.
3. Set the expected return and the years you need it to last.
4. The tool starts with a fixed monthly withdrawal. Turn on Withdraw less often for quarterly or yearly payouts, Yearly raise to keep up with inflation, Start later to let the corpus grow first, and After tax for the real income.

The chart shows the money still invested against everything withdrawn so far; the table shows every year in full.

Tax: SWP vs FD

Each SWP withdrawal is a sale of units, and only the gain part of it is taxed. In the early years most of each withdrawal is your own money coming back, so the tax is small. Equity funds pay 12.5% on gains above ₹1.25 lakh a year (after a year); debt funds bought from April 2023 are taxed at your slab.

An FD's interest, on the other hand, is fully taxed at your slab every year. That is why an SWP from a debt or hybrid fund often gives more income after tax than FD interest from the same corpus, at the cost of spending the corpus down.

The bucket idea

Many retirees split the corpus into buckets: two or three years of withdrawals in a liquid or short-term debt fund, the next few years in a hybrid fund, and the rest in equity for growth. The SWP runs from the safe bucket, which is topped up from the others after good years. That way a market fall never forces you to sell equity at a low price.

Common mistakes

• Taking too much early. A high first-year withdrawal plus a bad market year can empty the corpus years early.
• Ignoring inflation. A fixed ₹30,000 buys much less in 15 years. Use the yearly raise.
• All in equity. Money you live on needs a cushion of safer funds for the next few years.
• Forgetting the emergency fund. Keep some cash aside so you don't sell units in a falling market.

These figures are estimates checked in October 2026. This tool is a guide, not financial advice.