Systematic Withdrawal Plan (SWP) Calculator
Total investment (₹)
Withdrawal per month (₹)
Expected return rate (% P.A)
Time period (in Months)
Total Investment
₹50,00,000
Total Withdrawal
₹50,000
Final Value
₹50,000
What is a SWP Calculator?
Systematic Withdrawal Plan (SWP) is a popular financial strategy that allows you to withdraw a fixed amount from your mutual fund investments at regular intervals, such as monthly, quarterly, or annually. It provides a steady income stream to meet your recurring expenses while keeping the rest of your investment intact and letting it grow by generating returns.
A Systematic Withdrawal Plan calculator is a simple and handy tool that helps you estimate the amount you can withdraw from your mutual fund investments using a combination of various important factors that directly impact your corpus. Simply put, it is a guide that allows you to plan your withdrawal strategically while keeping your investment intact and growing. The SWP calculator takes the guesswork out of the financial planning process by providing clear projections of how your investment will be impacted over time.
This tool is especially beneficial for individuals seeking a steady income post-retirement or for those who want to supplement their monthly income without completely redeeming their mutual fund holdings.
The best SWP calculators, like the one offered by m.Stock, allow you to factor in variables such as inflation, expected returns, and withdrawal amounts. For instance, using an SWP calculator with inflation ensures that your withdrawals keep pace with the rising cost of living, enabling you to plan better.
How does the SWP calculator work?
An SWP calculator works by using specific inputs to provide you with an accurate projection of how your investments will perform over a given period. Here’s how it functions in simple terms:
You begin by entering key details such as
- The total amount invested in the mutual fund or your total corpus.
- The withdrawal amount you wish to receive regularly.
- The frequency of withdrawals, e.g., monthly, quarterly, annually.
- The expected rate of return on your mutual fund investment.
- The duration for which you plan to make these withdrawals.
Once you enter these details, the SWP calculator processes them to show you
- The total value of your remaining investment over time.
- The number of withdrawals you can make.
- The balance left after accounting for each withdrawal.
- Using an SWP calculator with inflation ensures that the calculations take into account the rising cost of living. This feature adjusts the withdrawal amounts or returns based on inflation rates, offering a realistic view of your financial planning. You can do this manually as well for more accurate projections.
- Withdrawal amount per month₹10,000
- Number of years10 years
- Annual Return8%
For example, if you use a SWP calculator and input a withdrawal amount of ₹10,000 per month for 10 years at an 8% annual return, the calculator will tell you whether your funds will sustain this withdrawal rate or if you will need adjustments.
By using varying combinations of inputs, you will get a better sense of the different potential outcomes. Using these, you can make informed decisions about managing your finances with an SWP in mutual fund investments.
Example of Systematic Withdrawal Plan
To understand how a Systematic Withdrawal Plan works, let’s look at an example
Imagine you invested ₹15,00,000 in a mutual fund offering an annual return of 7%. You decide to withdraw ₹15,000 monthly using an SWP in a mutual fund
- Starting Investment : ₹15,00,000
- Monthly Withdrawal : ₹5,000
- Annual Withdrawal : 15,000 x 12 = ₹1,80,000
- Expected Return : 7% annually
- Duration : 10 years
Here’s what happens
Year 1 : Your initial ₹15,00,000 earns interest at 7%, adding ₹1,05,000. After withdrawing ₹1,80,000 (₹ 15,000 x 12), your closing balance reduces slightly, but the remaining amount continues to grow.
Year 5 : By this point, you’ve withdrawn ₹9 Lakhs in total, but your fund balance hasn’t depleted entirely, thanks to compounding.
Year 10 : By the end of the set SWP tenure, you would have withdrawn ₹18 Lakhs, which is higher than your original corpus of ₹15 Lakhs, and still have a portion of your investment intact.,This provides you with sustained financial stability for the future.
Here’s a yearly breakdown of the SWP calculations.
| Year | Opening Balance (₹) | Returns (₹) | Withdrawal (₹) | Closing Balance (₹) |
|---|---|---|---|---|
| 1 | 15,00,000.00 | 1,05,000.00 | 1,80,000 | 14,25,000.00 |
| 2 | 14,25,000.00 | 99,750.00 | 1,80,000 | 13,44,750.00 |
| 3 | 13,44,750.00 | 94,132.50 | 1,80,000 | 12,58,882.50 |
| 4 | 12,58,882.50 | 88,121.78 | 1,80,000 | 11,67,004.28 |
| 5 | 11,67,004.28 | 81,690.30 | 1,80,000 | 10,68,694.57 |
| 6 | 10,68,694.57 | 74,808.62 | 1,80,000 | 9,63,503.19 |
| 7 | 9,63,503.19 | 67,445.22 | 1,80,000 | 8,50,948.42 |
| 8 | 8,50,948.42 | 59,566.39 | 1,80,000 | 7,30,514.81 |
| 9 | 7,30,514.81 | 51,136.04 | 1,80,000 | 6,01,650.84 |
| 10 | 6,01,650.84 | 42,115.56 | 1,80,000 | 4,63,766.40 |
This table shows how an SWP in mutual funds works. It also demonstrates the power of compounding. Even as you withdraw a fixed amount monthly, the remaining balance continues to generate returns interest, helping you sustain withdrawals over time.
Remember : The output of any SWP calculator depends on the fund’s actual performance and your withdrawal rate. This table is of illustrative purposes only.
How can a SWP calculator benefit you?
A Systematic Withdrawal Plan calculator is more than just a financial tool — it’s your partner in achieving financial independence. Here’s how it can benefit you:
The SWP calculator allows you to customise your withdrawal amounts and frequencies, making it easy to align with your financial goals. Whether you need a monthly income or a yearly withdrawal, the calculator adapts to your needs.
Using an SWP calculator with inflation ensures that your withdrawals are sustainable over time, helping you maintain your lifestyle without draining your investments prematurely.
By comparing different scenarios with the SWP calculator, you can determine the best mutual fund options that maximise returns while meeting your income requirements.
The systematic approach ensures that you withdraw only a manageable amount, preserving the principal investment and enabling long-term financial security.
Online SWP calculators, especially the m.Stock SWP calculator, are user-friendly, providing instant and accurate results, saving you time and effort in complex calculations.