SWP Calculator - Systematic Withdrawal Plan Calculator

Initial Investment Amount

Withdrawal Amount

Expected Annual Rate (%)

P.A

Duration (in Years)

Years

Final Value	-
Remaining Investment	-
Total Interest Amount	-
Total Withdrawal Amount	-

What is SWP?

The Systematic Withdrawal Plan (SWP) allows investors to receive regular income by systematically redeeming a portion of their mutual fund holdings. Under SWP, investors can choose to withdraw either a fixed amount or the returns generated by the investment at a set frequency—monthly, quarterly, or annually. For instance, if you own 8,000 units in a mutual fund and set up an SWP to withdraw ₹5,000 each month, the fund will redeem units based on the Net Asset Value (NAV) at the time of withdrawal.

Suppose the NAV on January 1, 2020, is ₹10. The mutual fund would redeem 500 units (₹5,000 ÷ ₹10) to provide the ₹5,000 payment, leaving you with 7,500 units. If the NAV rises to ₹15 by February 1, 2020, the mutual fund would redeem 333 units (₹5,000 ÷ ₹15) to meet the ₹5,000 payout, leaving you with 7,167 units. This process continues, allowing you to withdraw at regular intervals while retaining the balance in the fund.

What is the SWP Calculator?

An SWP (Systematic Withdrawal Plan) Calculator is a tool designed to estimate the monthly withdrawals and the remaining balance of a mutual fund investment over a specified period. This is especially useful for planning regular income, such as during retirement. By inputting details like the initial investment amount, monthly withdrawal amount, expected annual rate of return, and investment tenure, the SWP Calculator projects the future value of the investment after each withdrawal.

How Does the SWP Calculator Work?

The SWP Calculator uses a formula to calculate the impact of each withdrawal on the investment's future value. The formula is:
A = PMT ((1+r/n)^nt – 1) / (r/n))
Where:

A = Future Value of the Investment
PMT = Payment amount for each period
r = Annual rate of return
n = Number of times the return is compounded per period
t = Number of periods the money is invested

Example Calculation:

Suppose you start with an investment of ₹1,20,000 in a mutual fund and plan to withdraw ₹10,000 each month, with a 12-month withdrawal period and an expected annual return of 7%.

Month 1:

Beginning balance: ₹1,20,000
Withdrawal: ₹10,000
Interest added: Calculated based on the remaining balance and return rate
Ending balance: Calculated after the withdrawal and added interest

This process is repeated each month, with the calculator adjusting the balance based on the monthly withdrawal and accrued interest, showing you the future value of your investment at the end of the selected tenure.

How to use the go4calculator SWP Calculator?

The go4calculator SWP Calculator helps you to calculate the SWP mutual fund investment over a tenure. To use the go4calculator SWP Calculator:

You must fill in the total investment amount in mutual funds.
Enter the withdrawal per month from the mutual fund scheme
You must fill in the expected rate of return.
You then enter the tenure of the investment in years.
The go4calculator SWP Calculator will show you the total investment, total withdrawal, total interest earned, and the final value of the investment.

Benefits of go4calculator SWP Calculator

You may use the go4calculator SWP Calculator to calculate the monthly income from mutual fund investments, through the Systematic Withdrawal Plan.
You can try the go4calculator SWP Calculator for different withdrawal amounts and calculate the maturity amount.
The calculator helps you identify the best monthly withdrawals from the mutual fund scheme.
The go4calculator SWP Calculator helps you determine the SWP surplus, which you may invest in other financial instruments.

frequently asked questions

An investor can use a Systematic Withdrawal Plan when he wants to have a regular cash flow from his investments. The need for a Systematic Withdrawal Plan differs for every person. SWP can be useful for child education, paying EMI’s, retirement etc.

Any person who has invested in any of SBI Mutual Fund open-ended schemes can choose to start a Systematic Withdrawal Plan for a regular cash flow subject to lock-in period, if any.

A Systematic Withdrawal Plan(SWP) works in an opposite way to Systematic Investment Plan(SIP).A Systematic Investment Plan(SIP) allows an investor to invest a fixed amount at pre-determined intervals and a Systematic Withdrawal Plan(SWP) is a facility which allows an investor to withdraw a fixed amount at pre-determined intervals. The investor can choose the amount, the frequency and the duration of the SWP according to his needs. Withdrawals through SWP are subject to Exit Load as applicable.

The tax implications on Mutual Funds are determined based on the type of Mutual Fund and holding period (from date of acquisition up to the date of the redemption/transfer).

If the holding period is less than 1 year, then you realise Short Term Capital Gains which are taxable at a flat rate of 15%**. If the holding period is more than 1 year, then you realise Long Term Capital Gains which are taxable at a flat rate of 10%** if the Long Term Capital Gains exceed Rs.1,00,000 in a year. Long Term Capital Gains up to Rs.1,00,000 in a year are tax-free.

If the holding period is less than 3 years, then you realise Short Term Capital Gains which are taxable at the applicable slab rates**. If the holding period is more than 3 years, then you realise Long Term Capital Gains which are taxable at a flat rate of 20%** after allowing indexation benefit.

You can invest in an ELSS fund or Equity-linked Savings Scheme with SWP. It will help you save in taxes under section 80C of the Income Tax Act, 1961.

The returns from SWPs, among other factors such as volatility of the returns, the associated risk, the dividends earned, the tax saving features can help you choose the right SWP for you.

The major risk associated with SWP investments is the risk of a fall in the NAV of the mutual fund units due to a fall in the prices of the assets that the fund has invested in. This is because it may reduce the overall value of your investment.

The following are some of the disadvantages of SWP:

Averaged returns - Since you do not get to choose the time of the withdrawals and their amounts yourself, your investment’s returns get averaged over time.
Exit load - If you withdraw from the investment plan too soon, then the fund house may charge you an exit load.