What is SWP (Systematic Withdrawal Plan) and How the Calculator Works

A Systematic Withdrawal Plan (SWP) is a financial strategy that allows investors to withdraw a fixed amount of money from their mutual fund investments at regular intervals—usually monthly, quarterly, or annually.

This method is ideal for those seeking a steady source of income, such as retirees or individuals who want to supplement their earnings.

Understanding SWP

Unlike lump sum withdrawals, which can deplete your investment rapidly, an SWP enables more sustainable, consistent access to funds.

While your money continues to stay invested, it also has the potential to earn returns—helping to extend the life of your capital.

How SWP Works

When you initiate an SWP, a certain amount is deducted from your investment on a predetermined date. The units of your mutual fund are redeemed equivalent to the withdrawal value.

The remaining units continue to stay invested in the fund, potentially earning returns based on the fund’s performance.

Let’s say you have ₹10 lakhs invested in a balanced mutual fund and you set a monthly SWP of ₹10,000. Every month, units worth ₹10,000 will be redeemed and credited to your bank account, while the rest remains invested.

Benefits of SWP

• Regular Income: Ideal for retirees or those without a regular salary.
• Tax Efficiency: Unlike fixed deposits, long-term capital gains from equity funds may be more tax-efficient.
• Market Volatility Management: Since you withdraw only a portion each time, your money stays invested and may recover if markets go down.

How the SWP Calculator Helps

The Finkari SWP Calculator is a simple tool designed to help users estimate how long their investments will last under a systematic withdrawal plan. Here’s how it functions:

1. Input Your Investment Details:
   • Total Investment (₹)
   • Expected Annual Return (%)
   • Withdrawal Amount (₹ per month)
   • Investment Duration (in years)
     
2. See the Duration of Sustainability:
   Based on the withdrawal amount and interest earned, the calculator shows you how long your money can support the chosen withdrawal. It even displays results like “You can continue withdrawing ₹5,000 monthly for 18 years.”
   
3. Monthly Breakdown Table:
   The calculator generates a detailed table that includes:
   • Month-wise balance at beginning
   • Interest earned
   • Monthly withdrawal
   • Remaining balance
     
4. PDF Download Option:
   Users can download the full SWP report in PDF format for future reference or sharing with advisors.

Important Note

Disclaimer : This calculator is for educational and planning purposes. Actual fund performance may vary based on market conditions. Always consult with a certified financial advisor before making investment decisions.

Whether you’re planning for retirement or looking to generate passive income, an SWP offers a disciplined and sustainable method to manage your finances. Use our SWP calculator to make informed decisions and plan your financial future better.