SWP Calculator
Compare lump sum investments with systematic investments
SWP Calculator: How It Works
Our SWP calculator helps you plan regular withdrawals from your investments while accounting for continued growth:
End Balance = (Start Balance - Withdrawal) × (1 + r)
Where:
- Start Balance = Initial investment or previous period's end balance
- Withdrawal = Regular withdrawal amount
- r = Period interest rate (Annual Rate ÷ Periods per year ÷ 100)
The calculator determines how long your corpus will last with regular withdrawals and shows the remaining balance over time. It's an essential tool for retirement planning and creating a sustainable income stream from your investments.
Understanding Systematic Withdrawal Plans (SWP)
A Systematic Withdrawal Plan (SWP) is a facility offered by mutual funds and other investment platforms that allows investors to withdraw a fixed amount from their investments at regular intervals. It's particularly useful for retirees or anyone looking for a regular income stream from their investments.
How SWP Works
When you set up an SWP, you specify the amount you want to withdraw and the frequency (monthly, quarterly, etc.). On each withdrawal date, the specified amount is redeemed from your investment and transferred to your bank account. The remaining investment continues to earn returns.
Benefits of SWP
- Regular income stream while keeping your money invested
- Flexibility to choose withdrawal amount and frequency
- Potential for capital appreciation on the remaining investment
- More tax-efficient than dividend options in many cases
- Helps in managing cash flow during retirement
Factors Affecting SWP Performance
Several factors can affect how long your corpus will last under an SWP:
- Initial Investment: A larger corpus will generally last longer.
- Withdrawal Rate: Higher withdrawal amounts will deplete your corpus faster.
- Investment Returns: Higher returns can offset withdrawals and extend the life of your corpus.
- Withdrawal Frequency: More frequent withdrawals may affect compounding benefits.
- Inflation: Rising costs may require increasing your withdrawal amount over time.
SWP vs. Other Income Options
Compared to fixed deposits or dividend options, SWP offers more flexibility and potential for better returns. Unlike annuities, you maintain control over your investment. However, SWP doesn't guarantee that your money will last for a specific period - it depends on market performance and your withdrawal rate.
Disclaimer: The results provided by this SIP and Lumpsum calculator are for informational purposes only and do not constitute financial advice. Please consult a certified financial advisor before making any investment decisions.