SWP Calculator

Q: What is the formula for SWP?

The remaining balance after n months is: B(n) = P × (1+r)^n − W × [(1+r)^n − 1] / r, where P is the initial corpus, W is the monthly withdrawal, r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of months. This calculator uses a month-by-month simulation which gives equivalent results.

Q: What withdrawal rate is safe to sustain a corpus?

As a general guideline, the annual withdrawal rate should not exceed the expected annual return rate. For example, if your corpus earns 8% per year, withdrawing more than 8% annually will eventually deplete it. Many retirement planners use the 4% rule as a starting point, adjusted for inflation and return expectations.

Q: Is SWP income taxable in India?

Yes, SWP redemptions from mutual funds are subject to capital gains tax in India. Short-term capital gains (held less than 1 year for equity funds) are taxed at 15%. Long-term capital gains above ₹1 lakh per year are taxed at 10% for equity funds. For debt funds, gains are added to income and taxed at slab rate. Consult a tax advisor for your specific situation.

Q: Can I set up an SWP from a fixed deposit?

No, SWP as a formal scheme is specific to mutual funds. However, you can simulate a similar concept by setting up automatic bank transfers from your FD interest or by laddering multiple FDs with different maturity dates. This calculator is designed for mutual fund SWP scenarios.

Q: How does expected return rate affect SWP sustainability?

The return rate is the most critical factor in SWP sustainability. A higher return rate means the corpus grows faster, partially or fully offsetting the withdrawals. For example, at 12% annual return a ₹10L corpus can sustain ₹10,000/month withdrawals indefinitely, while at 6% the corpus will be depleted in under 15 years with the same withdrawal amount.

Initial Investment (₹)

Monthly Withdrawal (₹)

Expected Return (% p.a.)

Time Period (Years)

Your SWP Result

Final Corpus Value

Total Withdrawn

Total Growth Earned

Duration

Withdrawal-to-Growth Ratio

Corpus Balance Over Time

Corpus Breakdown

About This Calculator

What it calculates: Final corpus value, total amount withdrawn, total growth earned, and sustainability status for a Systematic Withdrawal Plan (SWP) from a mutual fund corpus.
Inputs required: Initial investment (₹), monthly withdrawal amount (₹), expected annual return rate (%), time period (years) or depletion mode
Outputs: Final corpus value (₹), total withdrawn (₹), total growth (₹), duration, withdrawal-to-growth ratio, year-wise balance breakdown
Formula: Month-by-month simulation: Balance(m) = Balance(m-1) × (1 + r) − W, where r = annual rate ÷ 12 ÷ 100, W = monthly withdrawal
Assumptions: Constant return rate (actual mutual fund returns vary); no tax or exit load applied; monthly withdrawal at end of each month; no inflation adjustment
Sustainability status: Sustainable = final corpus > 50% of initial; Borderline = final corpus 0–50% of initial; High Depletion Risk = corpus exhausted before period ends
Last updated: March 2026

How the SWP Calculator Works

A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from a mutual fund corpus every month while the remaining balance continues to earn returns. This calculator simulates the process month by month to show you how long your corpus lasts and what remains at the end.

The key insight: if the monthly return earned on your corpus is greater than the monthly withdrawal, your corpus grows. If returns are less than the withdrawal, the corpus shrinks over time. The calculator detects this and shows you a sustainability status.

SWP Formula

B(n) = P × (1+r)ⁿ − W × [(1+r)ⁿ − 1] / r

Where:

B(n) = Corpus balance after n months
P = Initial corpus (investment)
W = Monthly withdrawal amount
r = Monthly return rate (annual rate ÷ 12 ÷ 100)
n = Number of months

Example Calculation

Initial Corpus: ₹10,00,000

Monthly Withdrawal: ₹10,000

Expected Return: 8% per year

Time Period: 10 years

Total Withdrawn: ₹12,00,000

Final Corpus Value: ₹3,76,160 (approx)

Status: Borderline — reduce withdrawals or increase return target for better sustainability

How to Interpret the Sustainability Status

After calculating, the result shows one of three status badges:

Sustainable — The final corpus is more than 50% of your initial investment. Your withdrawal rate is conservative and the corpus is growing meaningfully despite withdrawals.
Borderline — The final corpus is between 0% and 50% of the initial investment. Withdrawals are consuming the corpus. Consider reducing monthly withdrawals or aiming for a higher return fund.
High Depletion Risk — The corpus runs out before the chosen time period ends. The withdrawal amount exceeds what the returns can sustain. Immediate recalibration is advised.

A common rule of thumb: keep annual withdrawals below the expected annual return rate to preserve the corpus indefinitely. For example, at 8% p.a. on ₹10L, the corpus earns ₹80,000/year — withdrawing more than ₹6,667/month will eventually deplete it.

SWP vs SIP — Key Differences

Direction: SIP is for building a corpus (invest every month). SWP is for distributing a corpus (withdraw every month).
Stage: SIP is used in the wealth accumulation phase. SWP is used in the wealth distribution or retirement phase.
Risk: SIP benefits from rupee cost averaging in volatile markets. SWP is affected negatively if markets fall (lower returns mean faster depletion).
Tax: Both SIP and SWP involve capital gains tax on redemptions. SWP redemptions are taxed as capital gains each month.
Goal: SIP targets a target corpus by a future date. SWP targets a monthly income from an existing corpus.

Risks and Limitations of SWP

Market risk: Returns are not guaranteed. A period of low returns or market correction can deplete the corpus faster than projected.
Sequence-of-returns risk: Poor returns early in the withdrawal phase can permanently impair the corpus even if average returns recover later.
Inflation risk: A fixed monthly withdrawal loses purchasing power over time due to inflation. This calculator does not model inflation.
Longevity risk: If you live longer than expected, the corpus may run out before you do. Always plan with a buffer of 5–10 extra years.
Tax drag: Capital gains tax on monthly SWP redemptions reduces the effective return. This calculator does not deduct tax.

Frequently Asked Questions

What is a Systematic Withdrawal Plan (SWP)?

A Systematic Withdrawal Plan (SWP) is a facility offered by mutual funds that lets you withdraw a fixed amount at regular intervals from your invested corpus. It is commonly used to generate regular income during retirement, allowing your remaining investment to continue earning returns while you draw a monthly income.

How is SWP return calculated?

SWP is calculated using monthly compounding. Each month, the remaining corpus earns a return at the monthly rate (annual rate ÷ 12), and then the withdrawal amount is deducted. This repeats until the end of the period or until the corpus is fully depleted. This calculator simulates this month-by-month to give accurate results.

What is the formula for SWP?

The closed-form formula is: B(n) = P × (1+r)^n − W × [(1+r)^n − 1] / r, where P is the initial corpus, W is the monthly withdrawal, r is the monthly rate (annual rate ÷ 12 ÷ 100), and n is the number of months. This calculator uses a month-by-month simulation for equivalent accuracy.

How is SWP different from SIP?

SIP (Systematic Investment Plan) involves investing a fixed amount every month to build a corpus. SWP is the reverse — you start with a corpus and withdraw a fixed amount every month while the rest earns returns. SIP is for wealth accumulation; SWP is for wealth distribution. Both use the same underlying mutual fund infrastructure.

What withdrawal rate is safe to sustain a corpus?

As a general rule, annual withdrawals should not exceed the expected annual return rate for the corpus to last indefinitely. Many retirement planners use a 4% annual withdrawal rate as a starting benchmark. With 8% annual returns, you can safely withdraw up to 8% of the corpus per year without depleting it, but lower returns or higher withdrawals will gradually reduce the corpus.

Is SWP income taxable in India?

Yes, each SWP redemption is treated as a capital gains event. For equity mutual funds, short-term capital gains (units held less than 1 year) are taxed at 15%, and long-term capital gains above ₹1 lakh per year are taxed at 10%. For debt funds, gains are taxed at your income slab rate. Consult a qualified tax advisor for your specific situation.

Can I set up an SWP from a fixed deposit?

No, SWP as a formal scheme is specific to mutual funds. Fixed deposits generate interest income, not SWP redemptions. However, you can create a similar monthly income strategy using FD interest payouts or by setting up automatic transfers. This calculator is designed specifically for mutual fund SWP scenarios.

How does expected return rate affect SWP sustainability?

The return rate is the most critical variable. A higher return rate means the corpus grows faster between withdrawals, partially or fully offsetting the withdrawals. For example, at 12% annual return, a ₹10L corpus can sustain ₹10,000/month withdrawals for much longer than at 6%, where the same withdrawal rate will deplete the corpus in around 12 years.

Calculator Category

This tool belongs to Finance Calculators. Browse similar tools for related calculations.

Important Notes

This calculator assumes a constant annual return rate. Actual mutual fund returns vary year to year and are not guaranteed. Market downturns can significantly accelerate corpus depletion compared to projections.

No tax deduction, exit load, fund management fee, or inflation adjustment is applied. Real-world outcomes will differ. Always build a buffer (5–10 extra years of corpus) beyond your planned withdrawal period.

For investment and retirement planning decisions, consult a SEBI-registered financial advisor. This tool is for illustrative purposes only and does not constitute investment advice.

Results are for informational purposes only and do not constitute financial or investment advice. Consult a qualified professional before making financial decisions.