SWP Calculator
The question every retiree asks in reverse: not "what will my SIP grow into" but "how long will my corpus last if I draw from it every month?" Set the corpus, the withdrawal and an expected return — with an annual step-up so the income keeps pace with inflation — and see the answer month by month.
Set the annual increase to expected inflation (~5–6%) to keep the withdrawal's purchasing power constant.
The break-even withdrawal: at 10% a year, a ₹1.00 Cr corpus earns about ₹83,333/mo — withdraw up to that and the corpus never shrinks (before any annual increase). Withdraw more and you're spending principal, which is fine if the horizon above is longer than you need it to be.
Assumes returns compound monthly at a constant rate — real market returns vary year to year, and a bad early sequence depletes a corpus faster than the average suggests. Withdrawals may attract capital-gains tax and exit loads. Projection, not a promise; not investment advice.
Turning a corpus into a monthly income
An SWP is how a retirement corpus — provident fund, gratuity, a lifetime of SIPs — becomes a salary again. The mechanics matter: because the unwithdrawn money stays invested, a corpus paying out less than it earns can fund you indefinitely, while one paying out slightly more erodes surprisingly fast once compounding starts working against you. Two rules of thumb keep an SWP honest: start below the break-even withdrawal the calculator shows, and keep one to two years of withdrawals in a liquid or debt fund so a bad first market year never forces you to sell equity units cheap — the sequence of early returns matters more than the average.
SWP questions, answered
What is an SWP (Systematic Withdrawal Plan)?
An SWP is the mirror image of a SIP: instead of investing a fixed amount every month, you redeem a fixed amount from a mutual fund every month while the rest of the corpus stays invested and keeps compounding. You choose the amount and the date; the fund house sells just enough units at that day's NAV to pay you.
Is an SWP better than living off FD interest?
They solve the same problem differently. FD interest is guaranteed but fully taxable at your slab rate, and the principal never grows. An SWP from a mutual fund carries market risk, but the remaining corpus can keep growing, withdrawals are partly your own capital back (so only the gains portion is taxed), and equity-fund gains enjoy concessional long-term rates. Many retirees blend the two: FDs for the floor, SWP for growth and tax efficiency.
How is an SWP taxed?
Every SWP instalment is a redemption, taxed like any mutual fund sale: each withdrawal is split into your original capital (not taxed) and the gain on the units sold (taxed). For equity funds, units held over a year qualify for long-term capital gains treatment with an annual exemption; units sold within a year are taxed at the higher short-term rate. Early in an SWP most of each withdrawal is capital, so the taxable gain is small — one reason SWPs are usually more tax-efficient than FD interest or IDCW payouts.
What withdrawal rate is safe?
A corpus is sustained when withdrawals stay below what it earns: at an assumed 10% return, a ₹1 crore corpus earns roughly ₹83,000 a month, so withdrawing less than that leaves the principal intact. In practice, planners suggest starting well below the break-even rate — commonly 4–6% of the corpus per year — because returns arrive unevenly and a bad early sequence does disproportionate damage. This calculator shows the exact break-even for your numbers.
SWP vs dividend (IDCW) plan — which is better for monthly income?
An SWP is almost always the better tool. IDCW payouts are decided by the fund house — the amount and timing are not guaranteed — and the entire payout is taxed at your slab rate. An SWP from a growth plan pays exactly the amount you choose, on your schedule, and only the gains portion of each withdrawal is taxed. IDCW is a distribution of your own NAV, not extra income.
Keep going
FundLens is a research tool, not a SEBI-registered investment adviser; nothing here is a recommendation to buy or sell. Projections assume constant returns — real returns vary year to year, tax rules change, and past returns don't guarantee future results. For retirement-income decisions, consider consulting a registered adviser.