SWP Calculator
See exactly how long a corpus can sustain a fixed monthly withdrawal, accounting for the returns it keeps earning along the way.
Planning a withdrawal phase
The single biggest lever
A small change in monthly withdrawal can add or remove years from how long a corpus lasts — this is usually a bigger factor than the assumed rate of return.
The corpus keeps growing too
An SWP isn't simple subtraction — the remaining balance keeps earning a return even as you withdraw from it, which is why a well-judged rate can make a corpus last far longer than a naive division suggests.
Order of returns matters in real life
This calculator assumes a constant annual return. In reality, poor returns early in a withdrawal phase deplete a corpus faster than the same poor returns arriving later — a real risk this simplified model doesn't capture.
- 01What is a Systematic Withdrawal Plan (SWP)?
- 02How SWP actually works, month by month
- 03The SWP simulation, explained
- 04A worked example, step by step
- 05Choosing a sustainable withdrawal rate
- 06Sequence risk: the danger this calculator doesn't model
- 07SWP vs a fixed deposit: which gives more income?
- 08How to use this calculator
What is a Systematic Withdrawal Plan (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 every month from an existing corpus, while the remainder stays invested and continues earning returns. SWPs are most commonly used by retirees or anyone needing a regular income stream from a lump sum of accumulated savings — mutual fund SWPs in particular are popular in India as a tax-efficient alternative to a regular pension-style payout.
The core question an SWP answers is simple to ask and surprisingly easy to get wrong by intuition: "If I withdraw ₹X every month from a corpus of ₹Y earning Z% annually, how long will the money actually last?" Because the remaining corpus keeps earning a return even as you draw it down, the answer is rarely as simple as dividing the corpus by the monthly withdrawal.
How SWP actually works, month by month
Each month, two things happen to your corpus, in this order: first it grows by that month's rate of return, then your fixed withdrawal is subtracted. This calculator simulates this exact month-by-month process rather than using a single shortcut formula, because the outcome depends on the interplay between the growth rate and the withdrawal amount in a way that compounds non-linearly over time.
If your monthly withdrawal is smaller than the average monthly growth the corpus generates, the balance can actually keep growing indefinitely even while you withdraw from it every month — the corpus essentially funds itself from returns alone, never touching the principal.
The SWP simulation, explained
This calculator runs an explicit simulation rather than a closed-form formula:
Balance(month) = Balance(month−1) × (1+i) − Withdrawal
Where i is the monthly rate of return (annual rate ÷ 12). This repeats month after month until the balance reaches zero (the corpus is exhausted) or 50 years pass, whichever happens first. The simulation approach, rather than a single algebraic formula, is necessary because it correctly captures how the corpus shrinks (or grows) at a changing pace as the balance itself changes.
A worked example, step by step
You have a corpus of ₹10,00,000, expect an 8% annual return, and withdraw ₹8,000 every month.
| Metric | Value |
|---|---|
| Starting corpus | ₹10,00,000 |
| Monthly withdrawal | ₹8,000 |
| Monthly return rate (8% ÷ 12) | 0.667% |
| Corpus lasts | ~22.5 years (270 months) |
| Total withdrawn over that period | ₹21,60,000 |
Notice the total withdrawn (₹21.6 lakh) is more than double the starting corpus (₹10 lakh) — the corpus lasted 22.5 years specifically because it kept earning a return throughout the withdrawal period, not because ₹10 lakh was simply divided into ₹8,000 chunks (which alone would only last 125 months, about 10.4 years).
Choosing a sustainable withdrawal rate
The single most important lever in any SWP plan is the withdrawal rate — the annual withdrawal as a percentage of the starting corpus. A commonly referenced starting point from retirement planning research is a 4% annual withdrawal rate (roughly 0.33% monthly) as historically sustainable over multi-decade periods for a balanced portfolio, though this figure is debated and depends heavily on the actual sequence of returns experienced, not just the average.
A small change in withdrawal rate can add or remove many years from how long a corpus lasts — this is usually a much larger lever than fine-tuning the assumed rate of return.
Sequence risk: the danger this calculator doesn't model
This calculator assumes a constant annual return every single month, which no real investment actually delivers. In reality, the order in which good and bad years arrive matters enormously during a withdrawal phase — a sequence of poor returns in the first few years of withdrawal can permanently impair a corpus in a way that the same poor returns, arriving later after the corpus had years to grow first, would not. This is called sequence-of-returns risk, and it's one of the most studied and important risks in retirement withdrawal planning, not captured by any single constant-rate model, including this one.
SWP vs a fixed deposit: which gives more income?
An FD pays a fixed interest rate and (if you choose monthly payout) a fixed monthly amount derived purely from that interest — it never touches your principal, but the income is capped by the prevailing FD rate. An SWP from an equity or hybrid mutual fund can sustain a higher withdrawal amount if actual returns outperform a typical FD rate, but carries market risk the FD does not, and a poorly judged withdrawal rate can deplete the principal entirely, unlike an FD. Many retirees use a combination of both, rather than relying on either exclusively.
How to use this calculator
- Enter your starting corpus — the lump sum you're drawing income from.
- Enter your desired monthly withdrawal amount.
- Set an expected annual return — use a conservative figure if this corpus needs to last decades.
- Read how long the corpus is projected to last, and the corpus-over-time chart showing the trajectory.
- If the corpus depletes sooner than you'd like, try lowering the monthly withdrawal and re-checking — small reductions often extend the corpus's life by years, not months.
Frequently asked questions
The simulation shows the exact month your corpus reaches zero given your inputs. In real life, you would need to either reduce withdrawals before that point, find another income source, or have planned a lower, more sustainable withdrawal rate from the start - this calculator is meant to help you spot that risk in advance, not after the fact.
It depends entirely on what the corpus is invested in. A debt-fund-heavy SWP might realistically use 6-7%; an equity-heavy SWP might use a more optimistic 10-12% long-term assumption, but with far more year-to-year variability than this calculator's constant-rate model captures. Use a conservative figure if you can't tolerate the corpus running out earlier than planned.
Yes, in practice most mutual fund SWPs can be modified, paused, or stopped by submitting a fresh instruction to your fund house or platform - SWP is a standing instruction, not a locked-in contract. This calculator doesn't model a mid-course change, but you can simply re-run it with new numbers to see the revised projection from that point forward.
No. Each SWP withdrawal from a mutual fund is treated as a partial redemption for tax purposes, with capital gains tax applying to the gains portion of each withdrawal (computed on a unit-redeemed basis), not the full withdrawal amount. This calculator shows pre-tax figures; consult a tax advisor for your specific situation.
Because the remaining balance keeps earning a return every month throughout the withdrawal period, not just sitting idle. In the worked example above, a corpus that would last only ~10.4 years under simple division (₹10L ÷ ₹8K/month) instead lasts ~22.5 years once monthly compounding on the remaining balance is correctly accounted for.
A pension is typically a fixed, often inflation-adjusted, payment for life backed by an insurer or employer, with no risk of the underlying fund depleting (the provider bears that risk). An SWP from a mutual fund has no such guarantee - if the withdrawal rate exceeds what the corpus's actual returns can sustain, the corpus can run out within your lifetime, which is the central risk this calculator helps you evaluate in advance.