SWP Calculator India – Systematic Withdrawal Plan Calculator

Systematic Withdrawal Plan (SWP) is a facility provided by mutual funds that allows investors to withdraw a specific amount from their investments at pre-determined intervals.

How it works: Unlike a dividend where the payout is uncertain, in an SWP, you decide the amount. To generate this cash flow, the mutual fund house sells a specific number of units from your portfolio every month. If the market is high, fewer units are sold; if the market is low, more units are sold to meet your withdrawal amount. Compare systematic withdrawals with fixed income options in SWP vs FD for monthly income.

Generally, SWP is considered more tax-efficient than the Dividend option (now called IDCW).

• Dividends: The entire dividend amount received is added to your income and taxed as per your income tax slab. If you are in the 30% slab, you pay 30% tax on the dividend.
• SWP: You only pay tax on the capital gains portion of the withdrawal, not the principal. For equity funds held over 1 year, gains up to ₹1.25 Lakh are tax-free per financial year (LTCG).

SWP withdrawals are treated as redemptions. The tax depends on the type of fund and holding period:

1. Equity Mutual Funds:

• STCG (Held < 1 year): Taxed at 20%.
• LTCG (Held > 1 year): Gains above ₹1.25 Lakh/year are taxed at 12.5%.

2. Debt Mutual Funds:

• Taxed as per your income tax slab (for investments made after April 1, 2023).

To compare SWP tax impact in detail and see how it performs against Fixed Deposits, use our Tax-Efficient SWP Calculator.

For detailed tax rules, visit the AMFI Tax Corner.

Capital erosion happens when your Withdrawal Rate is higher than your Investment Return Rate.

For example, if your fund grows at 8% per year but you withdraw 12% per year, you are eating into your principal amount. Over time, your investment value will decrease and eventually become zero. This calculator helps you spot capital erosion (look for the yellow or red warnings).

This calculator shows the nominal value of your corpus. It does not subtract inflation. Remember that a withdrawal of ₹50,000 today will have less purchasing power 10 years from now.

To plan effectively, you should ideally increase your SWP amount annually to combat inflation, or ensure your withdrawal rate is significantly lower than your return rate to allow the corpus to grow. To understand how long-term inflation affects post-retirement withdrawal, check impact of inflation after retirement.

Many long-term studies and historical analyses indicate that withdrawal rate in the range of 3% to 6% are commonly discussed for retirement planning,depending on market conditions and asset allocation. This calculator does not determine a suitable withdrawal rate for any individual.

If your portfolio is heavy on Equity (volatile), a lower withdrawal rate (3-4%) is safer to survive market crashes. If your portfolio is Debt-heavy (stable), you might manage a slightly higher rate (5-6%). Learn how much you can withdraw annually without running out of money in safe withdrawal rate in India.

You can also estimate long-term retirement sustainability using our Retirement Withdrawal Calculator.

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