How the SWP Calculator works
A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount every month from a lump-sum investment while the remaining balance keeps earning returns. It is a popular way to turn a corpus into a steady, regular income — for example in retirement.
How it is computed
Each month the balance first grows by the monthly return, then your withdrawal is taken out:
Balance = Balance × (1 + i) − Withdrawal
- i = Monthly return = annual return ÷ 12 ÷ 100
- This repeats every month; if the balance reaches zero, the tool shows how long your corpus actually lasted.
Worked example
Investing ₹10,00,000 and withdrawing ₹10,000 a month at an 8% expected return: over 10 years you take out ₹12,00,000 in total and still have about ₹3,90,180 left. That is because your withdrawal (₹1,20,000 a year, or 12% of the starting corpus) is drawn from a balance that also keeps growing at 8% — so the corpus shrinks slowly rather than all at once. The chart shows your remaining balance and the total withdrawn over time.
Things to keep in mind
- The key is the withdrawal rate versus the return. If your annual withdrawal is well below your return, the corpus can even keep growing; if it is much higher, the corpus depletes and the tool will show when.
- Returns are not guaranteed. A weak market early on (sequence-of-returns risk) can make a corpus run out faster than a steady-return estimate suggests.
- Each SWP withdrawal from a mutual fund is a partial redemption and may attract capital gains tax on the gain portion, and inflation slowly erodes the buying power of a fixed monthly withdrawal.
