SWP Calculator

The SWP calculator starts with your corpus, adds one month of growth at your expected return (the annual rate divided by 12), and then takes out your withdrawal. It repeats this for every month of the period you enter. You get three numbers back:

• Balance after period: what is left at the end of the period.
• Total withdrawn: the sum of your monthly withdrawals.
• Months sustained: how many months the corpus paid out, counted only up to the period you entered.

That last point is easy to misread. With the default inputs (₹10,00,000, ₹8,000 a month, 9% return, 10 years) the result shows 120 months sustained and a balance of about ₹9,03,243. The 120 is simply the whole period; it does not mean the money runs out after 10 years. To see how long the corpus really lasts, set the period to 40 years. The same inputs then show 372 months, or about 31 years.

The withdrawal that leaves your capital untouched equals one month of growth: corpus × annual return ÷ 12. For ₹10,00,000 at 9%, that is ₹7,500. Withdraw exactly that and the balance stays at ₹10,00,000 for as long as the 9% holds. Every rupee above it comes out of capital, and the drain speeds up as the balance shrinks.

Raising the withdrawal from ₹8,000 to ₹10,000 is 25% more income but cuts the life of the corpus roughly in half. A practical way to use the table: decide how many years of income you need, then raise the withdrawal until months sustained covers that span with a margin to spare.

The calculator applies the same return every month. Market-linked funds do not behave that way, so treat the rate as the average you hope to earn after costs, and test several values. Keeping ₹10,00,000 and ₹8,000 a month fixed:

• 6%: lasts about 16 years (197 months)
• 7%: about 19 years (225 months)
• 8%: about 22.5 years (270 months)
• 9%: about 31 years (372 months)
• 10%: about ₹31 lakh still left after 40 years

One or two percentage points in the assumption move the outcome by a decade or more. If your plan only works at the optimistic rate, it is fragile, so size the withdrawal to last long enough at a rate two points below your base case.

The model also keeps the withdrawal flat. If you plan to raise it as living costs rise, the money runs out sooner than shown. And weak years early in the withdrawal phase hurt more than the same years later, because you sell more units at low prices.

A monthly-payout FD pays only interest. ₹10,00,000 at an assumed 7% pays about ₹5,833 a month, the principal stays at ₹10,00,000, and the rate is fixed for the term. An SWP from a mutual fund pays whatever amount you choose, partly from gains and partly from capital, and the balance moves with the market.

Run the same ₹5,833 a month through this calculator at 9% and the balance after 10 years is about ₹13,22,588, because the assumed return is higher than the withdrawal. At 7% it stays at about ₹10,00,058, practically the same as the FD. In other words, the SWP comes out ahead only if the fund actually earns more than the FD rate over your period.

Tax also works differently. FD interest is taxed as income at your slab rate. Each SWP withdrawal is a sale of units, and only the gain on the units sold is taxed as capital gains, so in the early years most of each withdrawal is your own money coming back. Capital-gains rates depend on the type of fund and how long you held the units, so check the current rules before you compare post-tax income.