SWP Calculator

An SWP is a mutual fund facility that lets you withdraw a fixed amount from your fund holdings at a fixed frequency (usually monthly). You park a lump sum in a mutual fund and instruct the AMC to redeem a specific number of units every month and credit the proceeds to your bank account. The remaining units stay invested and continue to earn returns — think of it as the mirror image of a SIP.

An FD pays interest based on a guaranteed rate. An SWP redeems mutual fund units — the value depends on the fund's NAV at withdrawal time, which moves with markets. SWP can deliver higher long-term returns (especially from equity/hybrid funds) but the cash flow is less predictable. FD interest is taxed as "Other Income" at slab rate; SWP redemptions are taxed as capital gains, which is usually more favourable for long holding periods.

Each withdrawal is a partial redemption — so the gain portion is taxed as capital gains. For equity-oriented funds: LTCG (held > 12 months) at 12.5% above ₹1.25 lakh per FY; STCG (held ≤ 12 months) at 20%. For debt-oriented funds bought after 1 April 2023: gains taxed at slab rate regardless of holding period. Only the gain portion is taxed, not the principal — so SWP is materially more tax-efficient than FD interest at higher slabs.

Depends on three things: the corpus size, the withdrawal rate, and the actual return. The classic "4% rule" from retirement planning says withdrawing 4% of corpus per year (adjusted for inflation) gives a ~96% chance of lasting 30+ years. For Indian retirees with shorter horizons (15–20 years), 5–6% is often sustainable. This calculator shows whether your specific combination runs out within the tenure — flag if the result shows depletion.

Conservative: 7–8% (hybrid / debt-oriented funds). Moderate: 9–10% (balanced hybrid / multi-asset). Aggressive: 11–12% (large-cap equity SWP, only if you can stomach 20–30% market drawdowns mid-withdrawal). For a retirement SWP, planners typically suggest a balanced fund and assume 8–9% — equity exposure adds long-term return potential without making the cash-flow dependent on market peaks.

For many Indian retirees, yes — SWP from a balanced or multi-asset fund offers higher post-tax returns than SCSS + FD combinations, with tax efficiency that helps at high slabs. Drawbacks: requires comfort with NAV fluctuation, the cash flow can be paused but not "guaranteed" the way a pension is, and a bad market sequence early in retirement (sequence-of-returns risk) can deplete corpus faster than the math suggests. Many planners pair SWP with an annuity floor for essential expenses.

Yes. Most AMCs let you modify the withdrawal amount, frequency, or stop the SWP entirely with 7–15 days of notice. You can also do a "step-up SWP" where the withdrawal increases by a fixed percentage each year to keep pace with inflation. This calculator models a flat monthly amount; a step-up version would deplete corpus faster.

For resident Indians, TDS is generally not deducted on mutual fund redemptions — you self-declare and pay capital gains tax via advance tax / ITR. For NRIs, TDS applies at the relevant capital-gains rate at source. Make sure your KYC reflects your residency status accurately; misclassification creates compliance headaches at filing time.

Generally yes, post-Budget 2020. Mutual fund dividends (now called "IDCW" — income distribution cum capital withdrawal) are taxed at slab rate, while SWP gains are taxed as capital gains. At higher slabs the difference is meaningful — a 30%-slab taxpayer pays 30% on IDCW vs 12.5% LTCG on SWP from equity funds. SWP also gives you control over the cash flow timing; IDCW only pays when the AMC declares.

It assumes a constant return rate — the average return you select is applied every month. Real-world returns are uneven, so a fund that averages 10% will have months of −5% and months of +12%. Sequence matters: a bad early-year run can deplete corpus faster than the average suggests. Use this calculator for sizing and feasibility, not for forecasting the exact final corpus.