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Free SWP Calculator · Instant Results
SWP Calculator — Plan Your Monthly Income from Mutual Funds
Calculate systematic withdrawals from your mutual fund corpus. Track remaining balance, total returns earned, and find out how long your money will last with India's most intuitive SWP calculator.
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What is SWP (Systematic Withdrawal Plan)?
A Systematic Withdrawal Plan (SWP) allows investors to withdraw a fixed amount from their mutual fund investment at regular intervals — typically monthly. Unlike redeeming the entire investment at once, SWP lets your remaining corpus continue to earn market-linked returns while you receive a steady income stream. It is the reverse of SIP: while SIP builds wealth through regular investments, SWP distributes wealth through regular withdrawals.
SWP is widely used by retirees, early retirees, and anyone who needs predictable monthly income from their accumulated corpus. The key advantage is that your money stays invested and earns returns even as you withdraw, potentially extending the life of your corpus significantly compared to keeping it in a savings account.
SWP Calculation Formula
For each month: New Corpus = Previous Corpus x (1 + r/12) - W
Where r = Expected annual return rate, and W = Monthly withdrawal amount. The corpus grows by the monthly return rate first, then the withdrawal is deducted. This continues until the chosen duration ends or the corpus is fully depleted — whichever comes first.
SWP vs FD Interest for Retirement Income
Many retirees park their corpus in Fixed Deposits and live off the interest. While FDs offer safety, SWP in mutual funds can be significantly more advantageous:
- Higher effective returns: Balanced/hybrid funds historically deliver 8-10% vs 6-7% for FDs
- Tax efficiency: FD interest is fully taxable at your slab rate. In SWP, only the capital gains portion of each withdrawal is taxed, and equity LTCG up to Rs 1.25 lakh/year is tax-free
- Inflation protection: Equity exposure in SWP helps your corpus grow with inflation, preserving purchasing power over decades
- Flexibility: You can increase, decrease, pause, or stop SWP withdrawals anytime — FDs lock your money for the tenure
- Corpus longevity: With the right return rate and withdrawal amount, SWP corpus can last much longer than FD principal
SWP Tax Efficiency Explained
When you withdraw via SWP, you are redeeming mutual fund units. Each withdrawal has two components: your original investment (cost basis) and capital gains. Only the gains portion is taxable. For equity funds held over 1 year, long-term capital gains (LTCG) above Rs 1.25 lakh per year are taxed at 12.5%. For debt funds, gains are added to your income and taxed at your slab rate. This makes SWP significantly more tax-efficient than FD interest, where the entire interest amount is taxable at your marginal rate.
When to Use SWP
- Retirement income planning — generate monthly pension from your mutual fund corpus
- Supplementing salary — draw additional income from your investments
- Funding recurring expenses — child's education fees, EMIs, or rent
- Systematic profit booking — gradually exit a fund that has appreciated significantly
- Tax-efficient income — preferable to FD interest or dividend income for most tax brackets
Frequently Asked Questions
What is SWP (Systematic Withdrawal Plan)?
SWP (Systematic Withdrawal Plan) allows you to withdraw a fixed amount from your mutual fund investment at regular intervals — monthly, quarterly, or annually. Your remaining corpus continues to earn returns, making it an efficient way to generate regular income while keeping your money invested. It is essentially the reverse of SIP.
What is the difference between SWP and SIP?
SIP (Systematic Investment Plan) is for investing a fixed amount regularly into mutual funds to build wealth over time. SWP (Systematic Withdrawal Plan) is the reverse — you withdraw a fixed amount regularly from your existing mutual fund corpus. SIP is for the accumulation phase of your financial journey; SWP is for the distribution/income phase.
How is SWP taxed in India?
In SWP, only the capital gains portion of each withdrawal is taxed — not the entire amount. For equity funds held over 1 year, LTCG above Rs 1.25 lakh is taxed at 12.5%. For debt funds, gains are taxed as per your income tax slab. This makes SWP far more tax-efficient than FD interest, which is fully taxable at your marginal rate.
Is SWP good for retirement income?
Yes, SWP is one of the best strategies for retirement income. It provides regular monthly payouts while your remaining corpus continues earning market-linked returns. With a balanced fund returning 8-10% annually, SWP can provide sustainable income for 20-30+ years, depending on your withdrawal rate relative to your corpus.
How do returns work in SWP?
Your invested corpus continues to earn returns based on the fund's performance. Each month, the corpus grows by the monthly return rate, then your withdrawal is deducted. If your monthly returns exceed your withdrawal amount, the corpus can actually grow. If withdrawals exceed returns, the corpus gradually depletes over time.
What is better — SWP or dividend payout from mutual funds?
SWP is generally superior to dividend payout for regular income. Dividends are unpredictable in amount and timing, and are fully taxable at your income slab rate. SWP gives you a fixed, predictable income where only the capital gains portion is taxed. SWP also lets you control withdrawal amount and frequency, making it ideal for planned expenses.