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SWP Calculator - Calculate Systematic Withdrawal Plan

₹
₹
%
Yr

Your Results

Total Invested

Total Withdrawn

Remaining Balance

What is SWP?

SWP (Systematic Withdrawal Plan) is a facility that allows investors to withdraw a fixed amount from their mutual fund investment at regular intervals — monthly, quarterly, or annually. It is the reverse of SIP: instead of building a corpus through regular investments, you draw a regular income from an existing corpus.

SWP is particularly popular among retirees, senior citizens, and anyone seeking a steady passive income stream. Rather than redeeming the entire investment at once, SWP lets the remaining corpus continue earning returns while you receive a regular payout — giving you the best of both worlds.

How SWP Works

When you set up an SWP, the mutual fund redeems a calculated number of units each month equivalent to your chosen withdrawal amount. The remaining units stay invested and continue growing. If the fund delivers returns greater than your withdrawal rate, the corpus can sustain itself or even grow over time.

SWP Calculation Formula

Each month, the remaining corpus earns returns first, and then the withdrawal is deducted:

Formula:

Remaining Balance = Previous Balance × (1 + r) − W


Where:

r = Annual Return ÷ 12 ÷ 100 (monthly rate)

W = Monthly Withdrawal Amount


Worked Example:

- Total Investment: ₹10,00,000

- Monthly Withdrawal: ₹10,000

- Expected Annual Return: 8%

- Time Period: 10 years (120 months)


r = 8 / 12 / 100 = 0.006667

Month 1 Interest = 10,00,000 × 0.006667 = ₹6,667

Balance after Month 1 = 10,06,667 − 10,000 = ₹9,96,667

...

Balance after 120 months ≈ ₹9,27,161

Total Withdrawn = ₹10,000 × 120 = ₹12,00,000

Key Factors Affecting SWP

  • Withdrawal Amount: The higher your monthly withdrawal relative to the corpus, the faster it depletes. Keep withdrawals within the monthly returns earned for a sustainable SWP.
  • Expected Return Rate: A higher fund return rate sustains the corpus longer, as more interest is earned to offset each withdrawal.
  • Investment Duration: A longer withdrawal horizon requires a lower withdrawal rate to avoid corpus depletion before the period ends.
  • Initial Corpus Size: A larger initial corpus provides a bigger buffer and can sustain higher monthly withdrawals over longer periods.
  • Market Volatility: Actual mutual fund returns fluctuate. In down years, the corpus can deplete faster than calculator projections.

Frequently Asked Questions About SWP Calculator

What is SWP in mutual funds?
SWP (Systematic Withdrawal Plan) is a facility offered by mutual fund companies that allows you to withdraw a fixed sum of money from your mutual fund investments at regular intervals — monthly, quarterly, or annually. It is ideal for retirees and individuals seeking a regular passive income stream from their accumulated corpus.
How is SWP different from SIP?
SIP (Systematic Investment Plan) and SWP (Systematic Withdrawal Plan) are exact opposites. In SIP, you invest a fixed amount regularly into a mutual fund to build wealth over time. In SWP, you withdraw a fixed amount periodically from an existing mutual fund corpus. SIP is for wealth accumulation; SWP is for wealth distribution and generating regular income.
Is SWP tax-free in India?
No, SWP withdrawals are not entirely tax-free. Each withdrawal is treated as a redemption of mutual fund units. For equity funds, gains held for more than 1 year are taxed as LTCG at 10% (above ₹1 lakh per year); short-term gains are taxed at 15%. For debt funds, gains are added to income and taxed at your applicable slab rate. Only the gain portion of each withdrawal is taxable — not the principal.
What is a safe withdrawal rate for SWP?
A commonly used rule of thumb is the 4% annual rule — withdrawing 4% of your corpus per year (about 0.33% per month) is considered sustainable for 25–30 years in a balanced portfolio. For Indian investors with equity mutual funds earning 8–12% annually, a monthly withdrawal of 0.5–0.7% of the corpus is generally sustainable. Withdrawing above 1% per month can deplete the corpus quickly.
Can SWP corpus get depleted?
Yes. If your monthly withdrawal amount is higher than the returns your corpus earns each month, you will be drawing down the principal. Over time, this will deplete the corpus completely. Calcon's SWP Calculator shows you exactly when depletion will occur with a warning banner, helping you plan a sustainable withdrawal amount.
What happens when corpus runs out in SWP?
When your corpus is fully depleted, the mutual fund house stops processing SWP withdrawals automatically since there are no more units to redeem. You will no longer receive the monthly income. To prevent premature depletion, ensure your withdrawal amount is lower than the monthly returns your corpus generates.
Which mutual funds are best for SWP?
Balanced advantage funds, equity savings funds, and hybrid mutual funds are popular choices for SWP because they offer moderate growth with lower volatility. Large-cap equity funds are also used for long-term SWP strategies. Avoid high-volatility small-cap or sector funds for SWP, as sharp market downturns can rapidly deplete the corpus.
Can I change my SWP amount anytime?
Yes. You can modify, pause, increase, decrease, or stop your SWP at any time by submitting a request to your fund house or through your investment platform (such as Zerodha, Groww, or CAMS). Most fund houses process changes within 1–3 business days, and the updated amount applies from the next scheduled withdrawal date.
Is SWP better than FD for regular income?
SWP from equity or hybrid mutual funds can potentially provide higher income than FD interest over the long term, because the underlying corpus continues to grow. However, SWP returns are market-linked and not guaranteed, unlike fixed FD interest. FD is better for risk-averse investors who need guaranteed income, while SWP suits those comfortable with moderate market risk seeking inflation-beating returns.
How accurate is Calcon's SWP Calculator?
Calcon's SWP Calculator uses the standard month-by-month compounding formula: each month, the corpus earns the pro-rated annual return (Annual Rate ÷ 12 ÷ 100), and then the fixed withdrawal is deducted. Results are accurate to 2 decimal places. The calculator also warns you if your corpus will be depleted before the selected time period ends. Actual mutual fund returns vary based on market conditions.

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