How an SWP works
A systematic withdrawal plan sells a fixed amount of your mutual fund units every month and pays it to your bank — a do-it-yourself pension. What stays invested keeps earning (or losing) with the market.
Example
₹20 lakh earning an assumed 8% a year:
- Withdrawing ₹15,000 a month (9% a year of the starting amount), the money lasts the full 15 years with about ₹14.2 lakh still left.
- Withdrawing ₹20,000 a month (12% a year), it runs out after about 13 years 10 months.
Keep in mind
- Keep the yearly withdrawal well below the expected return if the money must last.
- Real returns vary year to year; a fall in the early years shortens how long the money lasts.
- Each withdrawal's gain is taxed by the fund's tax rules (see mutual funds); this calculator doesn't deduct tax.