Securing Hannav Ledger...
Securing Hannav Ledger...
Free SWP calculator for India — estimate remaining corpus, total withdrawals, interest earned, and exhaustion timeline for Systematic Withdrawal Plans in mutual funds.
Enter variables to compute real-time projections
₹4,56,69,095
₹4,17,49,095
₹1,60,80,000
3,096.46
Remaining = C*(1+i)^n - W*[((1+i)^n - 1)/i]*(1+i)SWP compounding and withdrawal exhaustion formula.
A Systematic Withdrawal Plan (SWP) is a structure that allows an investor to withdraw a specific sum of money from their mutual fund portfolio at regular intervals (usually monthly). Unlike a standard lumpsum withdrawal, the remaining balance continues to stay invested and accumulate compounding returns over time. This makes it an ideal retirement planning tool for generating regular cash flow from an accumulated corpus.
The remaining corpus at the end of the duration is computed as: Remaining Corpus = C*(1+i)^n - W * [((1+i)^n - 1) / i] * (1+i), where C is the initial corpus, W is the monthly withdrawal amount, i is the monthly interest rate (annual return / 12 / 100), and n is the total number of months (years * 12). The withdrawals are compounded monthly because they are distributed periodic payments. Total Withdrawn is simply W * n. Interest Earned is calculated as: Remaining Corpus + Total Withdrawn - Initial Corpus.
To understand the SWP: 1. Identify the starting principal corpus, the monthly withdrawal requirement, return expectations, and tenure. 2. Compound the starting corpus at the monthly return rate for the first month. 3. Subtract the monthly withdrawal at the beginning of the month. 4. Compound the remaining balance for the next month and repeat this process for all months. 5. At the end of the tenure, the final balance is the remaining corpus. 6. Sum all monthly withdrawals to find the total withdrawn, and calculate interest earned as the growth surplus.
Example 1: You start with an Initial Corpus of ₹10 Lakhs, withdraw ₹10,000 monthly, and expect an 8% p.a. return for 10 years. Total Withdrawn is ₹12 Lakhs; Remaining Corpus is ₹3.76 Lakhs; Interest Earned is ₹5.76 Lakhs. | Example 2: Initial Corpus is ₹50 Lakhs, monthly withdrawal is ₹35,000, and expected return is 9% p.a. for 15 years. Total Withdrawn is ₹63 Lakhs; Remaining Corpus is ₹51.48 Lakhs; Interest Earned is ₹64.48 Lakhs. | Example 3: Initial Corpus is ₹25 Lakhs, monthly withdrawal is ₹25,000, expected return is 7% p.a. for 8 years. Total Withdrawn is ₹24 Lakhs; Remaining Corpus is ₹12.32 Lakhs; Interest Earned is ₹11.32 Lakhs.
SWP redemptions are treated as regular mutual fund redemptions, and capital gains tax is applicable only on the appreciation (interest/growth) component of each withdrawal, not the principal. For Equity-Oriented funds, gains on withdrawals after 1 year are taxed as Long-Term Capital Gains (LTCG) at 12.5% for gains above ₹1.25 Lakhs per year. Withdrawals within 1 year are taxed as Short-Term Capital Gains (STCG) at 20%. For Debt funds, gains on all withdrawals are added to your taxable income and taxed at your applicable income tax slab rate.
Pros: 1. Regular Income: Provides a reliable monthly cash flow. 2. Tax Efficiency: Only the gains portion of withdrawals is taxed, making it more tax-efficient than FDs or annuities. 3. Compounding Growth: The remaining balance continues to earn returns. Cons: 1. Capital Depletion Risk: If the withdrawal rate is higher than the interest return rate, the corpus will deplete. 2. Market Risk: Equity portfolio values fluctuate, which can accelerate depletion during market downturns.
Systematic Withdrawal Plans (SWP) offer an excellent mechanism for converting mutual fund wealth into a sustainable, tax-efficient regular stream of income. By balancing withdrawal rates with portfolio return expectations, investors can ensure their retirement savings last for their entire lifetime.
Core tool: SWP Calculator · Related guide