SWP Calculator
About SWP (Systematic Withdrawal Plan)
Monthly
Most Common Withdrawal Frequency
3–4%
Safe Annual Withdrawal Rate (Rule of Thumb)
LTCG
Tax on Gains Only (Not Principal)
Any
Open-Ended Funds (Except ELSS)
A Systematic Withdrawal Plan (SWP) provides a regular income stream from your mutual fund corpus by redeeming a fixed amount at set intervals. It is widely used for retirement income planning. Unlike a dividend plan (IDCW), SWP gives you full control over withdrawal amounts and is more tax-efficient — only the capital gains portion of each withdrawal is taxable, not the returned principal.
Frequently Asked Questions
What is SWP and who should use it?
A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from your mutual fund at regular intervals (monthly, quarterly). It is ideal for retirees seeking a steady income stream from their accumulated corpus while keeping the remaining investment working. SWP provides more tax efficiency than FD interest because only the gain portion is taxed, not the principal.
How does this SWP calculator compute duration?
The calculator runs a month-by-month simulation: each month, the remaining balance earns the monthly return (annual rate ÷ 12), then the withdrawal amount is deducted. The simulation continues until the balance reaches zero, giving you the total number of months (and years) your corpus will last.
What is a safe withdrawal rate for retirement in India?
A commonly used rule of thumb is 4% per year (the '4% Rule') — based on a diversified equity+debt portfolio. In India, with higher inflation (5–6%) and potentially lower bond yields, many advisors recommend 3–3.5% per year as a safer withdrawal rate. For a ₹1 crore corpus, that means ₹3,000–3,500/month.
Is SWP income taxable in India?
Only the capital gains component of each SWP withdrawal is taxable — not the principal portion. For equity funds held over 1 year, LTCG above ₹1.25 lakh/year is taxed at 12.5%. For debt funds, gains are taxed at your income tax slab rate. This makes SWP more tax-efficient than FD interest, which is fully taxable.
Can I set up SWP in any mutual fund?
Most open-ended mutual funds (equity, hybrid, and debt) support SWP. Avoid SWP in ELSS funds because of the mandatory 3-year lock-in on each SIP instalment. For retirement SWP, balanced advantage funds or conservative hybrid funds are commonly used as they provide growth while managing downside risk.
How is SWP different from a dividend plan?
SWP gives you predictable, self-chosen withdrawal amounts from the growth plan. Dividend plans (now called IDCW) pay dividends only when declared by the AMC — amounts are uncertain and taxable at your slab rate. SWP is the preferred approach for retirement income planning because it gives control over cash flow and is more tax-efficient.
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Disclaimer: Returns are not guaranteed or assured. The calculator's accuracy is not warranted. Before making any investment decisions, please seek advice from your financial advisors.
