Question 1

What is SWP in mutual funds?

Accepted Answer

A Systematic Withdrawal Plan (SWP) lets you withdraw a fixed amount from your mutual fund corpus at regular intervals (monthly/quarterly). The remaining corpus continues to earn returns, potentially extending the life of your investment.

Question 2

How does the SWP calculator work?

Accepted Answer

The calculator simulates month-by-month withdrawal: each month, the corpus earns one month's interest and then the withdrawal amount is deducted. If the corpus balance falls to zero before the end of the tenure, it shows how many months the corpus lasted.

Question 3

What is the minimum corpus to sustain an SWP indefinitely?

Accepted Answer

To sustain withdrawals indefinitely (in perpetuity), the corpus must earn at least as much per month as the withdrawal. The formula is: Minimum Corpus = Monthly Withdrawal / Monthly Return Rate. This calculator shows this minimum corpus figure.

Question 4

Is SWP taxable?

Accepted Answer

Yes. Each SWP redemption is treated as a partial redemption of units. Gains are taxed as LTCG or STCG depending on the holding period of each unit being redeemed. FIFO method is used to determine which units are redeemed.

Question 5

SWP vs fixed deposit interest payout - which is better for retirement?

Accepted Answer

SWP from an equity fund offers potentially higher long-term returns but with market risk. FD interest payouts are guaranteed. For retirees, a hybrid approach - equity mutual fund corpus for growth, debt fund or FD for immediate withdrawal needs - often works better.

Year	Amount Invested	Est. Returns	Total Value
Yr 1	₹50.00 L	₹3.60 L	₹51.47 L
Yr 2	₹50.00 L	₹7.20 L	₹53.09 L
Yr 3	₹50.00 L	₹10.80 L	₹54.87 L
Yr 4	₹50.00 L	₹14.40 L	₹56.85 L
Yr 5	₹50.00 L	₹18.00 L	₹59.03 L
Yr 6	₹50.00 L	₹21.60 L	₹61.45 L
Yr 7	₹50.00 L	₹25.20 L	₹64.11 L
Yr 8	₹50.00 L	₹28.80 L	₹67.05 L
Yr 9	₹50.00 L	₹32.40 L	₹70.31 L
Yr 10	₹50.00 L	₹36.00 L	₹73.90 L

SWP Calculator

Year-by-Year Corpus vs Withdrawals

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