SWP Calculator
Systematic Withdrawal Plan calculator — see how a retirement corpus, sabbatical fund or coast-FIRE pot sustains a monthly withdrawal across the years.
SWP inputs
What is a SWP?
A Systematic Withdrawal Plan (SWP) is the mirror image of a SIP: instead of investing a fixed amount every month, you withdraw a fixed amount from an existing mutual-fund corpus. The remaining capital stays invested and continues to earn returns. SWPs are the workhorse of retirement income, sabbatical funding, and "drawdown" plans for early-retirement-style goals in India.
How the math works
Each month, the corpus first earns one month's return, then the withdrawal is subtracted:
balancenext = balance × (1 + r) − WWhere r is the monthly return and W is the monthly withdrawal. If withdrawal < corpus × r, the corpus actually grows. If withdrawal > corpus × r, the corpus depletes — slowly at first, then faster.
The 4% rule, India edition
Western "FIRE" planning popularised the 4% safe withdrawal rate. Indian context is different — inflation is higher (~6%), debt yields are higher (~7%), and equity premiums are healthier. Most independent advisors use 3.5–4.5% as a starting withdrawal rate for a 30-year horizon. Stress-test with this calculator before committing.
Tax treatment
- Each SWP withdrawal is treated as a partial redemption — only the capital-gains portion of that withdrawal is taxed, not the entire amount.
- Equity funds: 12.5% LTCG above ₹1.25L/yr exemption (units >1 year old); 20% STCG otherwise.
- Debt funds: gains taxed at slab rate (from FY 2023-24 onwards), no indexation.
- This makes SWPs more tax-efficient than dividend-payout plans, which are taxed at slab.